anonymous
  • anonymous
Can anyone explain the consumption function?
Economics - Financial Markets
  • Stacey Warren - Expert brainly.com
Hey! We 've verified this expert answer for you, click below to unlock the details :)
SOLVED
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
katieb
  • katieb
I got my questions answered at brainly.com in under 10 minutes. Go to brainly.com now for free help!
angela210793
  • angela210793
hope it helps|dw:1327907551175:dw|
anonymous
  • anonymous
C(Consumption function) = Co + cYo Here Co is autonomous consumption i.e. Minimum amount of consumption required for survival. Co will exist even if income(Y) is zero. c = MPC (Marginal propensity to consume) = the fraction of income that is consumed. Yo = national income at some point of time. To explain what is MPC, Y = C + S Divide the equation both sides by Y Y/Y = C/Y + S/Y 1 = MPC + MPS 1 = c + s c = marginal propensity to consume s = marginal propensity to save

Looking for something else?

Not the answer you are looking for? Search for more explanations.