Consumption function (消费函数)

Consumption function (消费函数 xiāo fèi hán shù) represents the functional relationship between consumption and the various factors determining it. A common example indicates the relationship between disposable income and consumer spending: C = a + b (Y – T), where C stands for consumption, a stands for autonomous consumption, b stands for marginal propensity to consume, Y stands for income and T stands for taxation.

Part 1: Breakdown of Words

• “Consumption” (消费 xiāo fèi) derives from:
  • “消” (xiāo) as in “offset” (抵消 dǐ xiāo), “wipe out” (消灭 xiāo miè), or “conume” (消耗  xiāo hào).
  • “费” (fèi) as in “tuition” (学费 xué fèi), “fee” (费用 fèi yòng), or “strenuous” (费力 fèi lì).
• Function (函数 hán shù) as in “convex function” (凸函数 tū hán shù) or “exponential function” (幂函数 mì hán shù).
  • “函” (hán) as in “correspondence course” (函授 hán shòu), “letter” (信函 xìn hán), or “send a letter” (致函 zhì hán).
  • “数” (shù) as in “digit” (数字 shù zì), “Mathematics” (数学 shù xué), or “quantity” (数量 shù liàng).