Consumption function shows the relationship between a nation's income and consumption and it is imperative in macroeconomics. The present study is causal in nature. The study is based on secondary data sources especially absolute income theory of consumption under the Keynes's short-run consumption function and psychological law of consumption. This paper is an endeavor to study the Keynes's short-run consumption function (SCF k ) with some special assumptions that SCF k is misleading to

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... te the macroeconomic policies. This study has developed a modified short-run consumption function (SCF m ) with some special assumptions. The SCF m shows that total consumption is lower than the total consumption by SCF k . So, the saving derived from SCF m is higher than the saving derived from SCF k . This study constructs that under some special assumption, SCF m helps to calculate the exact amount of consumption, saving, investment to formulate macroeconomic policy (policies) properly which has great impact in macroeconomics.