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What Are the Three Criteria for Causality? Why Do All

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What are the three criteria for causality? Why do all three criteria need to be addressed for causality to be considered?


Definitions:

Autonomous Consumption

The minimum level of consumption that would still occur even if a consumer had no income, based on basic needs and obligations.

MPS

Marginal Propensity to Save, which is the fraction of an increase in income that is not spent on an increase in consumption.

Disposable Income

Funds that households can direct towards their saving and spending ambitions after income taxes are accounted for.

Consumption

The portion of income spent on goods and services rather than saved.

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