26 CONSUMPTION, SAVING AND INVESTMENT

Since consumption depends on income, increase in income will bring about increase inconsumption over time period. In this context, MPC measures the increase in the amount of consumption due to increase in the amount of income in the country. Example 7: If consumption in period 1 is 200 and income is 300 and the same for

  Consumption, Investment, Savings, 26 consumption, Saving and investment