From 2008 to 2009, the falling stock market reduced the wealth of U.S. households, causing the United States to
A) move down along its consumption schedule.
B) shift its consumption schedule downward.
C) move up along its consumption schedule.
D) shift its consumption schedule upward.

Question

Quizplus · Accepted Answer

A decrease in wealth would cause a shift downward in the consumption schedule, as households would typically decrease their spending due to a decrease in available funds. Moving along the consumption schedule would imply a change in the level of income, which is not mentioned in the question.

From 2008 to 2009, the Falling Stock Market Reduced the Wealth