-In the above figure, a change in autonomous consumption to $4 billion with no change to the MPC
Would cause the consumption function to
A)shift downward.
B)shift upward.
C)become steeper.
D)become flatter.

Question

-In the above figure, a change in autonomous consumption to $4 billion with no change to the MPC
Would cause the consumption function to
A)shift downward. 
B)shift upward. 
C)become steeper. 
D)become flatter.

Quizplus · Accepted Answer

A change in autonomous consumption shifts the consumption function upward if it increases, as it represents the intercept of the consumption function.

-In the Above Figure, a Change in Autonomous Consumption to $4