As the consumption and saving schedules relate to real GDP, an increase in taxes will shift
A)upward both the consumption and saving schedules.
B)downward both the consumption and saving schedules.
C)the consumption schedule upward and the saving schedule downward.
D)the saving schedule upward and the consumption schedule downward.

Question

Quizplus · Accepted Answer

An increase in taxes reduces disposable income, leading to a decrease in both consumption and saving, thus shifting both schedules downward.

As the Consumption and Saving Schedules Relate to Real GDP