Keynes stated:
The fundamental psychological law... is that men [women] are disposed, as a rule and on average, to increase their consumption as their income increases, but not as much as the increase as the increase in their income*.
The fundamental psychological law... is that men [women] are disposed, as a rule and on average, to increase their consumption as their income increases, but not as much as the increase as the increase in their income*.
In short, Keynes postulated that the marginal propensity to consume (MPC), the rate of change of consumption for a unit (say, a dollar) change in income, is greater than zero but less than 1.
*John Maynard Keynes, The General Theory of Employment, Interest and Money, Harcourt Brace Jovanovich, New York, 1963, pg.96
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