Question

Explain Keynes' psychological law of consumption. What are the determinants of
propensity to consume?
long question
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Answer 1

Further, Keynes put forward a psychological law of consumption, according to which, as income increases consumption increases but not by as much as the increase in income. In other words, marginal propensity to consume is less than one. 1 > ∆C/∆Y > 0.