in an economy and initial increase in investment lead to an equal increase in income comment on the shape of the consumption curve .

Dear Student,

Consumption Function = C + bY
       where , c = Autonomous Consumption
                    b = MPC
                    Y = Income

And , we have to assume that MPC is 1 because MPC + MPS = 1 
(It means that our whole of income goes to consumption.)

Initial Increase in Investment leads to increase in Income . As, MPC is 1 so that whole of the income goes to consumption. it will leads to increase in consumption amd consumption curve will shifts to upward.(This means consumers are spending a higher percentage of their income.)


  
Regards.

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