The Psychological law of consumption states that

  1. Proportionate increase in consumption is less than proportionate increase in income
  2. Increase in income equal to increase in consumption
  3. Increase in consumption is greater than increase in income
  4. Consumption does not change with  change in income
Manish Listener Asked on 18th November 2014 in Science.
Add Comment
  • 1 Answer(s)

    According to the simple psychological facts we can say that tenancy of the people is to consume more when earnings or income increases.

    Keynes’ Psychological Law of Consumption:

    1. Proportional increase in consumption is less than proportional increase in income.
    2. An increase in income is  always bifurcated into spending and savings.
    3. An increase in income will lead to increase in both consumption and savings.

    These rules always works in normal conditions irrespective of time  and community.

    Pushpendra Pal Dean Answered on 18th November 2014.
    Add Comment
  • Your Answer

    By posting your answer, you agree to the privacy policy and terms of service.