Distinguish between:
5) Consumption Function and Saving Function
Consumption Function
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Savings Function
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It depicts the relationship between consumption expenditure and the level of disposable income
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It depicts the relationship between savings and the level of disposable income.
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C = f (Yd), where
C represents consumption expenditure
Yd represents disposable income.
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It shows how a change in income influences the consumption pattern.
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It shows how a change in income influences savings.
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