If disposable income decreases during a recession, there is
A) an upward shift in the consumption function.
B) a downward shift in the consumption function.
C) no change in consumption expenditures.
D) movement upward along the consumption function.
E) movement downward along the consumption function.

Question

Quizplus · Accepted Answer

When disposable income decreases, consumption expenditures decrease, leading to a movement downward along the consumption function, not a shift of the function itself.

If Disposable Income Decreases During a Recession, There Is