-In the above figure, a change in autonomous consumption to $1 trillion with no change to the MPC
Would cause the consumption function to
A) become flatter.
B) shift upward.
C) shift downward.
D) become steeper.

Question

-In the above figure, a change in autonomous consumption to $1 trillion with no change to the MPC
Would cause the consumption function to
A) become flatter. 
B) shift upward. 
C) shift downward. 
D) become steeper.

Quizplus · Accepted Answer

An increase in autonomous consumption would shift the consumption function upward, as it would increase consumption at all levels of income.

-In the Above Figure, a Change in Autonomous Consumption to $1