Respuesta :
Borrowing affects consumption because, when a household borrows, it can increase current consumption. The result will be upward shift regarding the current consumption schedule.
What causes consumption to increase?
First, consumption expenditure increases as income does. For every gain in income, consumption increases by the MPC times that increase in income. therefore, the pitch of the consumption get-together is the MPC. Second, at low situations of income, consumption is lesser than income.
What are the shifters of consumption?
Shifts of the consumption function can do when a change occurs in one of the independent consumption determinants( prospects, wealth, credit, levies, price situations). For illustration, significant positive returns in the stock request can increase consumer wealth which would beget independent consumption to increase.
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