After years of hard work in the field of macroeconomics, you win the Nobel Prize in economics (currently about $1.5 million).What is the most likely effect of this prize on your consumption function?
A)It will shift downward temporarily.
B)It will shift upward temporarily.
C)It will shift downward permanently.
D)It will shift upward permanently.
E)none of the above

Question

Quizplus · Accepted Answer

Winning the Nobel Prize is a permanent increase in wealth, which is likely to cause a permanent upward shift in the consumption function, as you will have more resources available for consumption over time.

After Years of Hard Work in the Field of Macroeconomics