Also to know is, wHAT IS A in consumption function?
The consumption function, or Keynesian consumption function, is an economic formula that represents the functional relationship between total consumption and gross national income.
One may also ask, what are the basic characteristics of the Keynesian consumption function? (1) Saving is a stable function of income, (2) The marginal propensity to save lies between zero and one, (3) The average propensity to save is directly related to income, (4) The marginal propensity to save remains constant or increases as income increases.
Also asked, what are the main characteristics of the consumption function?
characteristics: (1) Aggregate real consumption expenditure is a stable function of real income. (2) The marginal propensity to consume (MPC) or the slope of the consumption function defined as dc/dY must lie between zero and one i.e. 0 < MPC < 1.
How do you calculate consumption function?
The consumption function is calculated by first multiplying the marginal propensity to consume by disposable income. The resulting product is then added to autonomous consumption to get total spending.