An increase in consumer spending based on an increase in income is reflected by
A) an upward rotation of the consumption function.
B) an increase in the MPC.
C) a downward shift in the consumption function.
D) a movement up along the consumption function.

Question

Quizplus · Accepted Answer

An increase in consumer spending based on an increase in income is reflected by a movement up along the consumption function, as more income leads to more consumption at each level of disposable income. Therefore, the correct choice is D.

An Increase in Consumer Spending Based on an Increase in Income