A movement upward along the consumption function can be caused only by a(n)
A)increase in disposable income.
B)decrease in disposable income.
C)decrease in the price level.
D)increase in the price level.

Question

Quizplus · Accepted Answer

An increase in disposable income will cause an upward movement along the consumption function, as consumers will have more money to spend and will likely increase their consumption. A decrease in disposable income would cause a downward movement along the consumption function. Changes in price level would cause shifts in the consumption function, but not movements along it.

A Movement Upward Along the Consumption Function Can Be Caused