why is the consumption function important 
there are multiple reasons why the consumption function is important to economics it is a macroeconomic tool that can help economists understand the economy including how business cycles work and the function of the money supply among others economists and decision makers can use it and the formula to make investment decisions and shape monetary and fiscal policy to direct the economy the bottom linejohn maynard keynes introduced the idea of the consumption function which explains the relationship between a country s income and spending according to the theory spending is sensitive to the level of income so spending will increase when income does economists and leaders can use this theory to help make predictions about future spending and important economic and investment decisions for the future 