Consumption Function: - Consumption Function shows functional relationship between total consumption and total income.
C = f (Y)
Where, C = Consumption; Y= Level of income
Linear consumption function: - If the consumption function is given on the basis of constant marginal propensity to consume, is called linear consumption.
C = C + bY
Where, C = Consumption; C = Autonomous consumption / minimum level of consumption; b = Marginal propensity to consume; Y= Level of income.
