Final answer:
Consumption includes what a person intakes, like food, and their expenditures on goods and services, which is True. Disposable income greatly influences consumption, and households aim to smooth consumption over time through saving or borrowing.
Step-by-step explanation:
The statement that consumption includes both what a person intakes, such as food, and a person's expenditures used to support consumption is True. Consumption expenditure refers to spending by households and individuals on durable goods, nondurable goods, and services. Durable goods like automobiles are items that last over time, while nondurable goods, such as groceries, are consumed immediately. Services such as healthcare or entertainment are intangible purchases also included in consumption.
Economists like Keynes believe that disposable income is the most significant factor influencing consumption; it's the part of income left after taxes. Consumption expenditure patterns, as reported by the Consumer Expenditure Survey, show that spending habits vary depending on income levels, geography, and personal preferences. The concept of 'consumption smoothing' illustrates households' tendency to maintain steady consumption levels despite fluctuations in income by saving or dissaving (borrowing or spending savings).