‘As the income increases, people tend to save more’. Justify the given statement.
Komal Kohli May 18, 2022
‘As the income increases, people tend to save more’. Justify the given statement.
Answer.
At a lower level of income, a consumer spends a larger proportion of his/her income on consumption expenditure (basic survival requirements). As the income increases, owing to the psychological behavior of a consumer (rational), people tend to consume less and
save more for future uncertainty.
