The demand for current consumption, as plotted against current income, shifts to the right due to
A) a increase in current taxes.
B) an increase in future taxes.
C) an increase in current income.
D) a decrease in future income.
E) a decrease in interest rates.

Question

Quizplus · Accepted Answer

When current income increases, people tend to have more disposable income, which increases their ability to spend on current consumption. Hence, the demand for current consumption shifts to the right.

The Demand for Current Consumption, as Plotted Against Current Income