Question

What do you understand by parametric shift?

Answer 1

Parametric shift is a graph due to change in the value of a parameter. A positively sloping straight line swings upwards at its slope is decreases. A positively sloping straight line shifts upwards in parallel as its Intercept is increased. The parametric shift of line refers to the change in the consumption curve due to the changes in the slope shown in a graph due to change in the value of the parameter. When slope decreases the consumption curve will swing downwards which is called the parametric shift in the curve. When its intercept increases there will be a parallel shift in the consumption curve. Since intercept is an independent part of the ‘consumption function’