0 votes
2.9k views
in Economics by (13.8k points)
‘As the income increases, people tend to save more’. Justify the given statement

1 Answer

0 votes
by (210k points)
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.
...