Consumption Function . . Meaning of Consumption Function The consumption function or propensity to consume refers to income consumption relationship. It is a “functional relationship between two aggregates viz., total consumption and gross national income.” Symbolically, the relationship is represented as Where, C = Consumption Y = Income f = Function Thus the consumption function indicates a functional relationship between С and Y, where С is the dependent variable and Y is the independent variable, i.e., С is determined by Y.
This relationship is