The paper "The Impact of Regulation on Economic Growth in Developing Countries" is a great example of an assignment on macro and microeconomics. The consumption schedule helps to understand the number of goods and services that the consumer is willing to consume from the market at different disposable income levels when keeping the other determinants like wealth, price level, indebtedness, taxes and so the same. This will make the demand change at different levels of disposable income and the movement will be along the same demand curve instead of a shift in the demand curve which happens when other factors apart from the disposable income of the person change.
This is shown in the chart below Thus the consumption schedule of a household gets affected due to different factors which have been shown below (Consumption. 2012) Disposable Income: A change in the disposable income has an effect on the consumer purchasing power which thereby affects the consumption schedule. If the consumer has a negative sentiment and looks towards saving more of their income they will be left with little money to be spent on goods and services.
This will thereby have an effect on the demand for goods and services as consumers will look towards consuming less of it. The reverse happens in case consumers look towards reducing their savings and increasing the amount of money to be spent on goods and services. The disposable income which the consumer has and is willing to spend on the goods and services thereby has an effect on the consumption schedule. Interest Rates: Interest rates have an influence on the purchasing power of the consumers as higher interest rates make the consumer borrow little funds and look towards adjusting their expenditure from the income they have.
This will have an effect on the purchasing power and will make the consumer purchase less of the product and will thereby have an effect on the consumption schedule as it will fall. A decrease in the interest rates makes the consumer borrow more funds and look towards increasing their expenditure on goods and services up and above their income. This will have an effect on the purchasing power and will make the consumer purchase more of the product and will thereby have an effect on the consumption schedule as it will rise (Garg, 2010).
Consumption. 2012. Determinants of Consumption & Saving. Retrieved on October 13, 2012 from http://www.transtutors.com/homework-help/macro-economics/income-consumption-saving-relationship/consumption-saving-determinants/
Colell, M., Winston, A., Michael, D. & Jerry, R. 1995. Microeconomic Theory. 3r Edition, New York, Oxford University Press, Pearson Education
Garg, S. 2010. Microeconomics: Introductory. 7th edition, Dhanpat Rai Publication
Docters, R., Schefers, B., Korman, T. & Durman, C. 2008. The neglected demand curve: how to build one and benefit. Journal of Business Strategy, Volume 25, issue 5, pp. 19-25
Jalilian, H., Kirkpatrick, C. & Parker, D. 2003. Creating the Conditions for International Business Expansion: The Impact of Regulation on Economic Growth in Developing Countries – A Cross Country Analysis. Retrieved on October 13, 2012 from http://www.sed.manchester.ac.uk/idpm/research/publications/wp/depp/documents/depp_wp03.pdf
Mayerhoefer, C. & Zuvekas, S. 2008. The shape of demand: what does it tell us about direct to consumer marketing. The B.E. Journal of Economic Analysis & Policy, Volume 18, Issue 2, pp. 4-8
Shepherd, G. 2006. Vertical & Horizontal Shifts in demand curve. The Econometric Society, Volume 4, No. 4, pp. 361-367