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If the marginal propensity to consume is 06 what happens to the following. This might be interpreted as an upward shift in the consumption function.
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Do they rise or fall.
How does this shift affect investment and the interest rate. 2Suppose that an increase in consumer confidence raises consumers expectations about their future income and thus increases the amount they want to consume today. The government raises taxes by 100 billion. The effect of this change on the economy is an example of. 21Suppose that an increase in cosumer confidence raises consumer expectations about the future income and thus increases the amount they want to consume today. This might be interpreted as an upward shift in the consumption function.
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