CONSUMPTION FUNCTION: The positive relation between household consumption expenditures and household disposable income that forms one of the key building blocks for Keynesian economics. The consumption function is commonly presented as the consumption line or propensity-to-consume line. The slope of this line is the marginal propensity to consume, which is the proportion of any additional income used for consumption. The consumption function and the marginal propensity to consume play key roles in the multiplier and accelerator concepts. Because saving is the difference between disposable income and consumption, the saving function is a complementary relation to the consumption function.

     See also | Keynesian economics | consumption expenditures | disposable income | consumption line | multiplier | accelerator | saving function | income-expenditure model | marginal propensity to consume | induced consumption | autonomous consumption |

CONSUMPTION FUNCTION, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2026. [Accessed: March 12, 2026].

Additional information on this term can be found at:

WEB*pedia: consumption function

Back to the GLOSS*arama

The seventh of seven basic rules of the economy, stating that every action in the complex world has direct and often intended consequences combined with indirect and probably unintended effects.

Complete Entry | Visit the WEB*pedia

Today, you are likely to spend a great deal of time touring the new suburban shopping complex looking to buy either a combination CD player, clock radio, and telephone (with answering machine) or a revolving spice rack. Be on the lookout for rusty deck screws.
Your Complete Scope

This isn't me! What am I?

-- Merry Browne, Author

User Feedback