A movement along a consumption function is caused by:
A) a change in households' real assets.
B) a change in interest rates.
C) changes in households' disposable incomes.
D) expectations of price changes.

Question

Quizplus · Accepted Answer

Consumption function represents the relationship between households' disposable income and their level of consumption. Therefore, any changes in households' disposable incomes would cause a movement along the consumption function, as the level of consumption is directly influenced by the level of disposable income. Changes in real assets, interest rates, and expectations of price changes would shift the consumption function but not cause a movement along it.

A Movement Along a Consumption Function Is Caused By