Figure 11-3 -In Figure 11-3, which line represents the change in the consumption schedule caused by an increase in the personal income tax? A)C₁ in graph (a) B)C₂ in graph (a) C)C₁ in graph (b) D)C₂ in graph (b)

Question

Quizplus · Accepted Answer

An increase in the personal income tax would typically reduce disposable income, leading to a decrease in consumption at each level of aggregate income. This is represented by a shift of the consumption schedule downward in graph (b), which is option C.

Figure 11-3 ​

Figure 11-3