If people expect prices to fall in the future,
A)their consumption function in the present will shift downward.
B)their consumption function in the present will shift upward.
C)their consumption function in the present will be unchanged.
D)they will increase their current levels of consumption by moving up along their consumption functions.
E)they will decrease their current levels of consumption by moving down along their consumption functions.

Question

Quizplus · Accepted Answer

The Answer of If people expect prices to fall in the future,
A)their consumption function in the present will shift downward.
B)their consumption function in the present will shift upward.
C)their consumption function in the present will be unchanged.
D)they will increase their current levels of consumption by moving up along their consumption functions.
E)they will decrease their current levels of consumption by moving down along their consumption functions.

If People Expect Prices to Fall in the Future