_______________ explains the relationship between Consumption (C) and Income (Y) in terms of the psychological law of consumption.

Alfred Marshall

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J.M. Keynes

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Adam Smith

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Lionel Robbins

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Solution

The correct option is C J.M. Keynes
J.M Keynes explained the relationship between Consumption(C) and Income(Y) through the psychological law of consumption that stated, "as income goes on increasing, the consumption also increases but at a rate less than increase in income because there is always a part of income which is saved for future uncertainties".

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Similar questions

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The ratio of MPC and MPS is 4:1. The consumption at zero level of income is Rs. 40 crores.

(a) Frame a consumption equation

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The consumption equation is C = 125 + 0.5Y.
(a) Calculate break-even level of income.
(b) Calculate investment if the equilibrium level of income is Rs. 400 crores.

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