Question

Which of the following is a basic point that Keynes made about consumption? Question 5 options: Consumption and disposal income are inversely related. When disposable income changes, consumption changes by a greater amount. Consumption is dependent upon disposable income. b and c all of the above

Answer 1

Answer:

Consumption is dependent upon disposable income.

Explanation:

John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.

Gross Domestic Products (GDP) is a measure of the total market value of all finished goods and services made within a country during a specific period.

Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.

Basically, the four (4) major expenditure categories of GDP are consumption (C), investment (I), government purchases (G), and net exports (N).

In Economics, one of the basic point that John Maynard Keynes made about consumption is that it is typically dependent upon disposable income.

The Marginal Propensity to Consume (MPC) can be defined as the proportion of an aggregate increase in national income that an individual chooses to spend on the consumption of goods and services, rather than saving it.

Additionally, an average propensity to consume (APC) is a measure of the amount of money as a percentage that is being consumed by an individual or household rather than being saved.