Measures to Raise the Propensity to Consume

In the short period due to psychological and institutional factors, it is very difficult to stimulate consumption function which possible in long-run measures to raise propensity to consume in long run are as follows: Income Redistribution: Propensity to consume of poor people is higher than propensity to consume of rich people. Therefore, redistribution of income […]

Determinants of Consumption Function

The factors which determine the level of consumption is called determinants of consumption. J.M. Keynes mentions two principal factors which influence the consumption function and determine its nature (slope) and position. They are: subjective factors, and objective factors. Subjective Features: The subjective factors affecting propensity to consume consists of those psychological motives. Therefore, subjective factors […]