Editing Consumption function (section)

{{Short description|Economic model relating consumption and disposable income}}
{{Distinguish|demand function}}
[[File:Consumption Function.png|thumb|Graphical representation of the consumption function, where a is autonomous consumption (affected by interest rates, consumer expectations, etc.), b is the marginal propensity to consume and Yd is disposable income]]
In [[economics]], the '''consumption function''' describes a relationship between [[Consumption (economics)|consumption]] and [[Disposable and discretionary income|disposable income]].<ref>Algebraically, this means <math>C = f(Y_{d})</math> where <math>f \colon \mathbb{R}^{+} \to \mathbb{R}^{+}</math> is a [[Function (mathematics)|function]] that [[Map (mathematics)|maps]] levels of disposable income <math>Y_{d}</math>—income after government intervention, such as taxes or transfer payments—into levels of consumption <math>C</math>.</ref><ref>{{cite book |first=John |last=Lindauer |author-link=John Lindauer |title=Macroeconomics |location=New York |publisher=John Wiley & Sons |edition=Third |year=1976 |isbn=0-471-53572-9 |pages=40–43 }}</ref> The concept is believed to have been introduced into [[macroeconomics]] by [[John Maynard Keynes]] in 1936, who used it to develop the notion of a [[Fiscal multiplier|government spending multiplier]].<ref>{{cite book |last1=Hall |first1=Robert E. |author-link=Robert Hall (economist) |last2=Taylor |first2=John B. |author2-link=John B. Taylor |chapter=Consumption and Income |pages=63–67 |title=Macroeconomics: Theory, Performance, and Policy |location=New York |publisher=W. W. Norton |year=1986 |isbn=0-393-95398-X }}</ref>