Which of the following would cause the consumption function to shift downward?
A) A decrease in taxes
B) A decrease in interest rates
C) Consumers become more pessimistic about the future
D) Consumers become more optimistic about the future
E) None of the above

Question

Quizplus · Accepted Answer

If consumers become more pessimistic about the future, they are likely to save more and spend less, causing the consumption function to shift downward.

Which of the Following Would Cause the Consumption Function to Shift