**Question 19**The consumption function shows how _______.- ○ consumption depends on the decision to save- ○ income varies as a result of changes in consumption- ○ the marginal propensity to consume varies with disposable income- ● ~~all of the above~~- ○ none of the above*Explanation:*This question explores different aspects of the consumption function, which in economics refers to the relationship between consumption and income. Here, the correct answer was initially marked as "all of the above," but it has been crossed out, indicating it might not be the intended correct response. Each option describes a different perspective on how consumption might be influenced.

Answered: Question 19 The consumption function…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Expert Solution

Step 1

Marginal propensity to consume is the proportion of the disposable income that a person wants to spend on consumption. It is computed as the ratio of change in consumption due to a change in disposable income or total real domestic output.

The national income is measured as the sum of consumption and saving. Consumption is that part of income which is not saved and used to purchase goods and services. Savings represent that part of a consumer’s income which is neither used for consumption nor paid as government taxes.

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions