Economics · Consumption and Saving Theories
Consider the following statements regarding consumption and saving functions: I. According to Keynes' psychological law of consumption, as income rises, the proportion of income spent on consumption decreases. II. According to Kuznets' empirical observations, in the long run, as national income rises, the average propensity to save remains fairly stable and constant. Which of the above statements is/are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Only II
- 2Only I
- 3Neither I nor II
- 4Both I and II✓
Correct answer
Both I and II
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