A movement from one point to an another point on the same consumption function could be caused due to
A)changes in wealth.
B)an increase in the general price level.
C)decrease in the real interest rates.
D)changes in disposable income.

Question

Quizplus · Accepted Answer

Movement along a consumption function is caused by a change in disposable income, as it is the only variable in the consumption function that is not held constant. An increase in disposable income would cause a movement upward while a decrease in disposable income would cause a movement downward. Changes in wealth, general price level, and real interest rates would affect the position of the consumption function itself, causing a shift rather than a movement along it.

A Movement from One Point to an Another Point on the Same