## Income, Savings And Consumption – Economic Study Material

The consumption function or propensity to consume refers to income consumption relationship. It is a “functional relationship between two aggregates viz., total consumption and gross national income.” Symbolically, the relationship is represented as C= f (Y) Where, C = Consumption Y = Income f = Function Thus the consumption function indicates a functional relationship between […]

## How Effective demand increase the level of Employment – Economic Studymaterial

Effective Demand The starting point of Keynes theory of employment and income is the principle of effective demand. Effective demand denotes money actually spent by the people on products of industry. The money which entrepreneurs receive is paid in the form of rent, wages, interest and profit. Therefore effective demand equals national income. An increase […]