Class XII Economics: Consumption Function and Aggregate Demand

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What does the consumption function show?

Functional relationship between income and consumption

Define Aggregate Demand (AD).

Total value of all final goods and services planned to be bought by all sectors of the economy at a given income level during a period of time

List the components of Aggregate Demand (AD).

Household consumption expenditure (C), Investment expenditure (I), Government consumption expenditure (G), Net export (X-M)

What does Aggregate Supply (AS) refer to?

Total value of all final goods and services planned to be produced by all producing units in the economy during a given period of time

What does Autonomous Consumption refer to?

Consumption that does not change with a change in income

What is the equation of the consumption function?

C = f(Y)

Test your knowledge on the consumption function and aggregate demand concepts from Class XII Economics. Explore the relationship between income and consumption expenditure, as well as the total expenditure on goods and services in an economy.

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