If disposable income decreased,which of the following changes in the consumption-function line would occur?
A) A rightward movement along the line
B) A leftward movement along the line
C) The entire line would shift upward
D) The entire line would shift downward
E) The entire line would shift downward and there would be a rightward movement along the new line

Question

Quizplus · Accepted Answer

A decrease in disposable income would lead to individuals having less money to spend on consumption, resulting in a reduction in their consumption expenditure. This would lead to a leftward movement along the consumption-function line, as the level of consumption would decrease at each level of disposable income.

If Disposable Income Decreased,which of the Following Changes in the Consumption-Function