"The rate of increase in consumption is equal to the rate of increase in income". Do you agree with this statement?

Open in App

Solution

The rate of increase in consumption might be less than the rate of increase in income as their is always some part of the income which is contributed towards savings in the economy.

Suggest Corrections

Similar questions

Q. Psychological law of consumption states that "as income goes on increasing, the consumption also increases but at a rate less than increase in income.

There is an increase in investment by Rs. 200 crores. This has increased the income multifold. What will be the total increase in consumption if consumption function is C = 50 + 0.5Y?

Q. State whether the following statements are true or false. Give reasons.
An increase in the rate of tax with an increase in income is called proportional tax.

Q. "The spongy cotyledon increases in size as it absorbs food material stored in the endosperm ".Do you agree with this statement ? why or why not?

In an economy, 75 per cent of the increase in income is spent on consumption, Investment is increased by Rs 1,00 crore. Calculate :

(i) Total increase in income.

(ii) Total increase in consumption expenditure.

Join BYJU'S Learning Program