Figure 8-2

-Every Christmas, you buy yourself a lottery ticket.This year, you win the $500 million Powerball.This would most likely cause your consumption function to
A)shift downward temporarily.
B)shift upward permanently.
C)shift downward permanently.
D)shift upward temporarily.

Question

Figure 8-2
​ 
-Every Christmas, you buy yourself a lottery ticket.This year, you win the $500 million Powerball.This would most likely cause your consumption function to
A)shift downward temporarily. 
B)shift upward permanently. 
C)shift downward permanently. 
D)shift upward temporarily.

Quizplus · Accepted Answer

Winning a $500 million Powerball would significantly increase your wealth, leading to a permanent upward shift in your consumption function as you would likely increase your spending and consumption habits over the long term due to the increased wealth.

Figure 8-2 ​

Figure 8-2