gabrielle4496 gabrielle4496
  • 21-06-2021
  • Business
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What is true about the relationship between household consumption and disposable income?

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Nyctalus
Nyctalus Nyctalus
  • 23-06-2021

Answer:

Both have positive relationship with each other

Explanation:

In simple words, Consumption rises in lockstep with current revenue and that the higher the marginal inclination to purchase, the much more present expenditure is influenced by current disposable revenue . The consumption-smoothing impact is higher when the marginal willingness to consume is low.

  Thus, from the above we can conclude that both have non linear positive relation.

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