The consumption function is drawn on a graph with disposable income on the horizontal axis without including investment. Assume investment is autonomous and is added to the consumption function. The effect is:
A)an upward adjustment in the vertical intercept.
B)no change in the adjustment in the vertical intercept.
C)an increase in the slope of the consumption schedule.
D)a decrease in the slope of the planned expenditure schedule.

Question

Quizplus · Accepted Answer

Adding autonomous investment to the consumption function results in an upward shift of the entire consumption function, which increases the vertical intercept.

The Consumption Function Is Drawn on a Graph with Disposable