<span lang="EN-US

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

Where,

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.