A decrease in disposable income will
A)lead to an upward movement along the consumption function.
B)lead to a downward movement along the consumption function.
C)shift the consumption function upward.
D)shift the consumption function downward.

Question

Quizplus · Accepted Answer

According to the consumption function, as disposable income decreases, consumption also decreases. This results in a downward movement along the consumption function.

A Decrease in Disposable Income Will