Question

Which formula represents the consumption function?

विकल्प

• \[APC=\frac{C}{Y}\]

• \[C=\bar{C}+cY\]

• \[MPC=c=\frac{\Delta C}{\Delta Y}\]

• \[MPS=s=\frac{\Delta S}{\Delta Y}\]

Answer 1

The consumption function is \[C=\bar{C}+cY\]. Here, \[\bar{C}\] is autonomous consumption and \[cY\] is induced consumption.