A consumption schedule indicates the various amounts households plan to consume at various possible levels of disposable income which might prevail at some specific point in time.-Because disposable income equals consumption plus saving (DI=C+S) you need only subtract consumption from disposable income to find the amount saved at each level of DI.-Break-even income is the level at which households consume their entire income.-APC= consumption/ income-APS= saving / income-APC + APS= 1-MPC= change in consumption/ change in income-MPS= change in saving / change in income-MPC + MPS = 1-Nonincome determinants of Consumption and Saving are wealth, price level, expectation, consumer indebtedness, taxation.-Consumption spending and saving both rise when disposable income increases; they fall when disposable income decrases.-The average propensity to consume is the fraction of any given level of disposable income which is consumed; the average propensity to save is the fraction of any given level of disposable income which is saved.-The marginal propensity to consume is the fraction of any change in disposable income which is spent for consumer goods and is the slope of the consumer schedule; the marginal propensity to save is the fraction of any change in disposable income which is saved and is the slope of the saving schedule.-A specific investment will be undertake if the expected rate of net profits exceeds the real interest rate.-The investment demand curve shows the expected rates of net profits for various levels of total investment.-Total investment is established where the real interest rate and the expected rate of net profits on investment are equal.-The investment demad curve shifts when changes occur in the costs of capital goods, business taxes, technology, the stock of capital goods on hand, and business expectations....
