Question

Basic properties of Keynesian propensity to consume are ______.

Options

• c = f(y)

• c lies between zero and unity

• linear consumption function

• none of these

Answer 1

Basic properties of Keynesian propensity to consume are c = f(y).

Explanation:

• In the Keynesian model, consumption (c) is a function of income (y), written as c = f(y). 
• This means that as income increases, consumption also increases, though at a diminishing rate.