00:01
Alright in this problem we have consumption is a function of current disposable income.
00:06
Alright, discuss that.
00:07
Okay, so first of all, what is consumption? consumption is what a household consumes.
00:14
Alright, so what is it that the households of the economy are consuming? that's going to be consumption.
00:21
It's the process that consumers use to get what their house needs or wants, right? so disposable income, what is that? disposable income, i'm just going to call it di.
00:35
What is disposable income? well that's where you have after you have your, so it's basically what you have after taxes and after your savings and your, i really shouldn't say savings because not everybody does savings, but it's essentially everything that the government and your business takes out after taxes, alright? so that's your disposable income.
01:06
So there is a relationship between the consumption of households and your disposable income, alright? so that means that if you have more disposable income, alright, so i'm going to say the higher your disposable income, then the higher your consumption.
01:23
I'm just going to put cons...