A study of Keynes’ Psychological law of consumption – implications of the law
Keywords:
Autonomous Consumption, ConsumptionAbstract
The body of scientific knowledge can be reduced to a “set of laws that are both general and robust enough to be useful in describing and predicting behavior. These laws can be applied to describe and predict the actions of a wide range of entities, including physical objects (such as the orbits of the planets), invisible forces (such as electricity), economies (why some thrive while others stagnate), and even individuals (education as deliberate investment in human capital). Engel's law, the rule of demand (the downwardly sloping demand curve), the law of scattered quantities relative to prices, and the law for price elasticities are the four empirical regularities in consumer behavior that are identified in this work.
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