The wealth effect is shown graphically as a
A) shift of the consumption schedule.
B) movement along an existing consumption schedule.
C) shift of the investment schedule.
D) movement along an existing investment schedule.

Question

Quizplus · Accepted Answer

The wealth effect is illustrated graphically as a shift of the consumption schedule because it reflects a change in consumer behavior due to changes in wealth, leading to an increase or decrease in consumption at all levels of income.

The Wealth Effect Is Shown Graphically as a