Economics · Consumption Function
As income falls, consumption declines but proportionately less than the decrease in income because consumers desire to sustain their previous standard of living. This phenomenon is called the:
- 1income effect
- 2demonstration effect
- 3wealth effect
- 4ratchet effect✓
Correct answer
ratchet effect
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Want more practice questions on Consumption Function?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Consumption Function