A movement along the consumption-function line would most likely be caused by a(n)
A) increase in net taxes
B) decrease in net taxes
C) increase in income
D) decrease in productivity
E) change in autonomous consumption

Question

Quizplus · Accepted Answer

An increase in income would cause a movement along the consumption-function line because as income increases, consumption tends to increase as well. This is reflected in the upward sloping nature of the consumption-function line. A decrease in net taxes or a change in autonomous consumption would shift the entire consumption-function line upward or downward, respectively. A decrease in productivity would likely decrease income and shift the consumption-function line downward.

A Movement Along the Consumption-Function Line Would Most Likely Be