Answer :

Change in consumption curve due to the change in its slope is known as parametric shift in the curve.

Let C = C + by be the consumption function


b – MPC

y – Income

(i) When slope decreases – The consumption curve will swing downwards. This is known as parametric shift in the curve.

(ii) When its intercept increases – Intercept is the autonomous part of consumption function, so when intercept increases there will be a parallel shift in the consumption curve.

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