Check sibling questions

‘As the income increases, people tend to save more’. Justify the given statement.

(2 Marks)

Answer

When people are at a lower level of income, they spend a major part of their income as consumption expenditure for basic consumption

However, as the income increases their consumption levels go down, they become rational and start saving more.

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Davneet Singh

Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.