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The purchase of consumer goods and the acquisition of financial assets represent alternative uses of personal income. Since such decisions about the disposition of income are interdependent, it seems necessary to develop a theory of the interrelated demand for consumer goods and financial assets. At first this article examines several standard consumption functions to determine to what extent demand for consumer goods and asset investment are included. In the main section the Ball-Drake approach — expanded to include adjustment and disequilibrium costs — is used to develop a consumption function, which takes into account the interdependent demand for consumer goods and financial assets. Several empirically tested consumption functions can be considered to be special cases of the hypothesis developed in this paper. It is shown in a simulated experiment that this consumption function can reproduce the anticyclical behavior of the average propensity to consume observed in the real world. Furthermore it becomes evident that a high trend rate of growth in income leads to a high propensity to save.