The figure given below shows the consumption functions of an economy.?Figure 9.4

-Refer to Figure 9.4. Which of the following could explain a downward shift of the consumption function from C₁ to C₃?
A) An increase in household wealth
B) A decrease in the proportion of young people in the population
C) An increase in the size of the population
D) A decrease in consumer confidence
E) An autonomous decrease in saving

Question

The figure given below shows the consumption functions of an economy.?Figure 9.4
 
-Refer to Figure 9.4. Which of the following could explain a downward shift of the consumption function from C₁ to C₃?
A) An increase in household wealth 
B) A decrease in the proportion of young people in the population 
C) An increase in the size of the population 
D) A decrease in consumer confidence 
E) An autonomous decrease in saving

Quizplus · Accepted Answer

A decrease in consumer confidence could lead to a decrease in consumption spending, resulting in a downward shift of the consumption function from C₁ to C₃.

The Figure Given Below Shows the Consumption Functions of an Economy.?Figure