CONSUMPTION FUNCTION What is consumption function Consumption function

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CONSUMPTION FUNCTION

CONSUMPTION FUNCTION

What is consumption function? Consumption function shows what expenditure consumers will wish to make

What is consumption function? Consumption function shows what expenditure consumers will wish to make on consumer’s goods and services at each possible level of income

Determinants of consumption function Subjective factors Objective factors

Determinants of consumption function Subjective factors Objective factors

Subjective factors Farsightedness Economic independence Occupational motive Miserliness Status in society Precautionary motive Extension

Subjective factors Farsightedness Economic independence Occupational motive Miserliness Status in society Precautionary motive Extension of business Liquidity preference Financial prudence modernization

Objective factors Change in money income Change in real income Windfall gains and losses

Objective factors Change in money income Change in real income Windfall gains and losses Expectations Fiscal policy Wages Liquid assets Attraction of new products Availability of goods Change in population Duesenberry hypothesis

Psychological law of consumption Assumptions-1)no change in psychological and institutional complex 2)normal conditions 3)laissez

Psychological law of consumption Assumptions-1)no change in psychological and institutional complex 2)normal conditions 3)laissez faire

Explanation

Explanation

Importance of law Importance to investment Refutation of say’s law Decline in MPC Underemployment

Importance of law Importance to investment Refutation of say’s law Decline in MPC Underemployment equilibrium Over saving gap Movement of trade cycles Secular stagnation State intervention Inducement to invest

Measures to raise propensity to invest Redistribution of income Social security Credit facilities Increase

Measures to raise propensity to invest Redistribution of income Social security Credit facilities Increase in population Demonstration effect Advertisement Means of transport

Criticism of propensity to consume No proper use of propensity Simple truism Unrealistic Not

Criticism of propensity to consume No proper use of propensity Simple truism Unrealistic Not secular It is a fraud

UNIT 11 CONSUMPTION FUNCTION INVESTMENT FUNCTION CONSUMPTION FUNCTIONUNIT 11 CONSUMPTION FUNCTION INVESTMENT FUNCTION CONSUMPTION FUNCTION
Consumption Function Consumption Function CF Greater part ofConsumption Function Consumption Function CF Greater part of
Lecture 2 Water Consumption Water Consumption The consumptionLecture 2 Water Consumption Water Consumption The consumption
Lecture 3 Water Consumption Water Consumption The consumptionLecture 3 Water Consumption Water Consumption The consumption
CONSUMPTION FUNCTION Shows the relationship between consumption andCONSUMPTION FUNCTION Shows the relationship between consumption and
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Function Function Declaration Function Definition Calling a FunctionFunction Function Declaration Function Definition Calling a Function
Consumption Choice Sets u A consumption choice setConsumption Choice Sets u A consumption choice set
CONSUMPTION SAVINGS Consumption Introduction Expenditure during a particularCONSUMPTION SAVINGS Consumption Introduction Expenditure during a particular