[tex]\huge{\color{black}{\underline{\color{black} {\underline{\color{white} {\textbf{\textsf{\colorbox{black}{➳qυєѕтισɳ:-}}}}}}}}}[/tex] ➳What is the psychological law of consumption???
According to Keyne's Psychological Law of Consumption, Consumption is a function of income. In his words; “Human is disposal by nature, as income increases, consumption expenditure also increases but increase in consumption is smaller than the increase in income”.
Mathematically C= f(y) ; i.e. C = a + b(y), Where a = Autonomous Consumption, b = MPC and Y = Income
Keynes introduced the law of consumption which is popularly known as the Keynesian Law of Consumption. According to the law, As income increases consumption also increases but at a lesser rate than the increase in income.
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According to Keyne's Psychological Law of Consumption, Consumption is a function of income. In his words; “Human is disposal by nature, as income increases, consumption expenditure also increases but increase in consumption is smaller than the increase in income”.
Mathematically C= f(y) ; i.e. C = a + b(y), Where a = Autonomous Consumption, b = MPC and Y = Income
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Keynesian Psychological Law of Consumption
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