If a consumption schedule shifts upward, this means that the:
A)MPC has increased.
B)MPS has decreased.
C)APC is now higher at each level of disposable income.
D)APC is now lower at each level of disposable income.

Question

Quizplus · Accepted Answer

If the consumption schedule shifts upward, it means that at each level of disposable income, people are consuming a higher proportion of their income. This means the average propensity to consume (APC) is now higher at each level of disposable income. Therefore, the correct answer is C. The answer cannot be A or B because the question asks about a shift in the consumption schedule, not a change in the MPC or MPS. The answer cannot be D because if the APC is now higher at each level of disposable income, it cannot also be lower at each level.

If a Consumption Schedule Shifts Upward, This Means That The