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CONSUMPTION,

INVESTMENT &
SAVINGS
LINES
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ASST.PROF.TERESITA BALGOS

Keynesian Cross Diagram : 45 degrees diagram

The Consumption Function

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ASST.PROF.TERESITA BALGOS

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POSITIVE SHIFT

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NEGATIVE SHIFT

ASST.PROF.TERESITA BALGOS

2/15/2016

ASST.PROF.TERESITA BALGOS

The consumption function relates consumption C to disposable personal income Yd. The
equation for the consumption function shown here in tabular and graphical form is C = $300
billion + 0.8Yd.

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ASST.PROF.TERESITA BALGOS

Shifts in Consumption

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ASST.PROF.TERESITA BALGOS

The Relationship Between Consumption and


Disposable Personal Income, 19602008

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ASST.PROF.TERESITA BALGOS