1. Consumption Fun

2. Meaning of Consumption Fun. It shows the relationship between aggregate consumption expenditure and national income. C= f(Y )

3. Define Diilard, “the propensity to consume is a simple relationship between income and consumption.”

4. Types of Propensity to Consume APC = C/Y MPC = Change in Consumption/ change in Income

5. Determinants of Con./ Measure to raise the PTC Foresightedness Status in the society Miserliness Economics independence Extension of Business Precautionary Motive Enlarged Income in future Occupational Motive Liquidity Preference Moderniztion

6. Change in real income Change in money income Change in Distribution of Income Social Security Fiscal Policy Availability of GOODS Change in fashion and taste Change in population Duesenberry Hyp

7. Stable and variable income Credit facility Transportation facility

8. Psychological law of consumption Assumptions No change in psychological and institutional complex Normal conditions Laissez – faire PROPOSTIONS OF LAW Increased agg. Income leads to increased agg. Con but by a smaller amount Increased income is divided between con and saving

9. An increase in agg income is unlikely to lead either to less con or less saving than before