The amount of consumption expenditure corresponding to different levels of income presented in the form of a schedule or a table is called the consumption schedule or the schedule of the propensity to consume. In the table given below, in that we have shown the various levels of income and levels of consumption expenditure corresponding to these levels of income. The table presented here is thus a hypothetical schedule which shows the amount of consumption expenditure at different income levels.
From the above table, it is clear that as the income level goes up, the consumption expenditure rises along with it. But while the level of consumption expenditure goes up along with the rise in income, it is not necessarily equal to it. Since, at higher levels of income most of the people are likely to save a part of it; consumption expenditure is usually less than the income level. But at lower levels of income people may find it difficult to save any part of income and hence consumption expenditure may be equal to income.SUBMIT ASSIGNMENT NOW!