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Homework answers / question archive / In the following passage, what important concept is Keynes introducing here? Why is this concept important to modern macroeconomics? Explain with an example
In the following passage, what important concept is Keynes introducing here? Why is this
concept important to modern macroeconomics? Explain with an example.
The fundamental psychological law, upon which we are entitled to depend with great confidence
both a priori from our knowledge of human nature and from the detailed facts of experience, is
that men are disposed, as a rule and on the average, to increase their consumption as their income
increases, but not by as much as the increase in their income.
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