Figure 11-3 In Figure 11-3, which line represents the change in the consumption schedule caused by a cut in fixed taxes? A) C₁ in graph (a) B) C₂ in graph (a) C) C₁ in graph (b) D) C₂ in graph (b)

Question

Quizplus · Accepted Answer

In graph (a), a cut in fixed taxes causes a movement from C₁ to C₂, indicating an increase in consumption at every level of income. Therefore, option B represents the change in the consumption schedule caused by a cut in fixed taxes.

Figure 11-3 in Figure 11-3, Which Line Represents the Change in the Change