The figure given below shows the consumption function of a household.
Figure 9.2
-In Figure 9.2, consumption equals disposable income:
Definitions:
Contractual Capacity
Contractual capacity refers to the legal ability of a party to enter into a contract, generally requiring them to be of sound mind and of legal age.
Binding Agreement
A contract or deal between two or more parties that is legally enforceable in a court of law.
Legal Ability
The capability or qualification to engage in a legal task or to perform legal duties, often requiring specific knowledge or licensing.
Statutory Law
Laws that have been formally written and passed by legislative bodies.
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