Consumption is the destruction of utility Consumption means using goods and services for satisfying current wants Consumption

on expenditure means household spending, which satisfies our immediate wants Consumption generally increases with increase in income

Consumption is a function of income C =f(Y) C = Consumption F = Function Y = Income It says that when income increases ,consumption will also increase but less than the increase in income

Precaution motive Foresight motive Standard of living Status motive Expectation Fiscal policies Stock of wealth

Useful in firms and business(It helps in estimation of future demand or important decisions like expansion of firm) Helps in explaining business cycle(Business cycles are the upswing and downswings in the economic activity)

Investment means capital expenditure i.e., the expenditure on purchasing physical assets, machinery, equipments etc. Items, that helps to increase productive capacity.

Gross Investment Net investment Private investment Public investment Induce investment Autonomous investment

Investment Rate of interest Marginal efficiency of capital