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  Aspects of Keynesian Law of Consumption

Keynesian Law of Consumption implies the following three aspects:

The concept of consumption function plays a crucial role in Keynesian income determination which is as follows:

1) Raise in income and raise in consumption are not at identical proportion. Consumption function is positive however less than one.

2) An augment in income is shared among saving and consumption.

3) Raise in income will not cause mount in consumption and saving at similar time. When the rate of increase in savings increases, the rate of increase in consumption will drop.

 

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