1.

if income of a consumer rises by Rs. 50,000 , what will be its impact on his consumption expenditure ? Comment on his response .

Answer» the consumer would like to increase his expenditure but by less than increase in income . This is accrding to keynesian Psychological law of consumption which states As. Income increases , consumption expenditure also increase but by less than increase in income there is tendency of the people not to spend on consumption the whole in incremental income .


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