Description : When income increase, consumption also increases : (1) in a lower proportion (2) in a higher proportion (3) in the same proportion (4) None of the options
Last Answer : (1) in a lower proportion Explanation: According to the Keynesian Consumption theory, "men are disposed, as a rule and on average, to increase their consumption as their income increases, but ... consume decreases, i.e., house-holds spend a decreasing proportion of marginal income on consumption.