CONSUMPTION FUNCTION | SAVING FUNCTION |
It is the relationship between consumption expenditure and the level of disposable income. | It is the relationship between savings and the level of disposable income |
C = f (Yd) , where C represents the consumption expenditure Yd represents disposable income | S = -S(bar) + sYd where S(bar) is autonomous saving s represents marginal propensity to save Yd represents disposable income |
It shows how a change in income influences the consumption pattern | it shows how change in income influences savings |