90 THE GENERAL THEORY OF EMPLOYMENT BK. III

to investment. The factors which govern these twoquantities are largely distinct. In this book we shallconsider the former, namely what factors determinethe sum which will be spent on consumption whenemployment is at a given level; and in Book IV weshall proceed to the factors which determine the sumwhich will be devoted to investment.

Since we are here concerned in determining whatsum will be spent on consumption when employmentis at a given level, we should, strictly speaking, con-sider the function which relates the former quantity(C) to the latter (N). It is more convenient, however,to work in terms of a slightly different function,namely, the function which relates the consumption interms of wage-units (Cω ) to the income in terms ofwage-units (Yω ) corresponding to a level of employ-ment N. This suffers from the objection that Yω isnot a unique function of N, which is the same in allcircumstances. For the relationship between Yω andN may depend (though probably in a very minordegree) on the precise nature of the employment.That is to say, two different distributions of a givenaggregate employment N between different employ-ments might (owing to the different shapes of the indi-vidual employment functions—a matter to be discussedin Chapter 20 below) lead to different values of YωIn conceivable circumstances a special allowance mighthave to be made for this factor. But in general it is agood approximation to regard Yω as uniquely deter-mined by N. We will therefore define what we shallcall the propensity to consume as the functional relation-ship x between Yω, a given level of income in terms ofwage-units, and Cω the expenditure on consumption outof that level of income, so that

Cω = X(Yω ) or C = W . X(YΧ ).

The amount that the community spends on con-sumption obviously depends (i) partly on the amount