If disposable income increases,
A) there is movement downward along the consumption function.
B) the consumption function shifts upward.
C) there is a movement upward along the consumption function.
D) the consumption function shifts downward.

Question

Quizplus · Accepted Answer

When disposable income increases, there is a movement upward along the consumption function, as people tend to consume more with higher disposable income.

If Disposable Income Increases