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, 2000-2019. [Accessed: August 23, 2019].

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Another term for the long-run average cost curve. The long-run average cost curve is termed the planning horizon or planning curve because it provides information that a firm can use to plan factory construction and expansion in the long run.

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