Econ Macro (book Only)
Econ Macro (book Only)
6th Edition
ISBN: 9781337408745
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 9, Problem 3P
To determine

Graphical representation of consumption function and its slope.

Introduction: Consumption function represents the functional relationship between total consumption and gross national income. Consumer spending depends on three factors: disposable income (Yd), autonomous consumption (a), i.e. when income is zero, and induced income (b), i.e. the percentage of extra income that is spent. The formula for the same is C = a + b*Yd.

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