Examlex
-What is the structure indicated by the number 2 in Figure 12.1 and what is its functional significance?
Marginal Propensity
The fraction of an additional unit of income that is spent on consumption rather than being saved.
Consumption Function
The relationship in the economy between consumption and income, other things constant.
Saving Function
The relationship between the level of saving and the level of income, typically showing that saving increases as income increases.
Consumption Function
An economic formula that expresses the relationship between total consumption and gross national income, indicating how much households are likely to spend.
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