Consumption function

A consumption function is like a way to predict how much stuff people will buy or use. It's like trying to guess how much candy someone would eat if you gave them $10.

The important thing to remember about a consumption function is that it's based on something called disposable income, which is how much money people have left over after they pay for things they absolutely need like rent or food.

So let's say you have $100 and you need to pay $50 for rent and $30 for groceries. That means your disposable income is $20. Based on your disposable income, you might decide to buy $10 worth of candy. That $10 worth of candy is called your consumption.

Now, a consumption function is like trying to guess how much candy everyone in the world would eat based on how much disposable income they have. We look at things like salaries, taxes, and prices of goods to try and figure out how much people will consume.

Overall, a consumption function helps us understand how much stuff people will buy or use based on how much money they have left over after paying for things they need.