Consumption schedule::
45° line:: The reference line in a two-dimensional graph that shows equality between the variable measured on the horizontal axis and the variable measured on the vertical axis.
Saving schedule::
dissaving::
break-even income::
Note: When developing macroeconomic models, economists change their focus from the relationship between consumption (and saving) and disposable income to the relationship between consumption (and saving) and real domestic output (real GDP)
A change in income/real GDP alone causes ^^movement along the schedules^^, such as from a to b in the above figure.
A shift of the entire schedule/line, such as from C0 to C1, is caused by a change in one or more nonincome determinants.
Wealth
wealth::
wealth effect::
Borrowing
By allowing households to spend more, borrowing shifts the current consumption schedule upward.
Expectations
Real interest rates