What Does Consumption Function Mean?The consumption function is a mathematical formula laid out by famed economist John Maynard Keynes. The formula was designed to show the relationship between real disposable income and consumer spending, the latter variable being what Keynes considered the most important determinant of short-term demand in an economy.
The consumption function is represented as:

Where:
C = Consumer spending
A = Autonomous consumption, or the level of consumption that would still exist even if income was $0
M = Marginal propensity to consume, which is the ratio of consumption changes to income changes
D = Real disposable income