If people's real assets increase, then the:

Question

Quizplus · Accepted Answer

If people's real assets increase, then their wealth increases, which in turn leads to an increase in their consumption expenditure. This means that for any given level of disposable income, people now spend more on consumption than they did before. This translates to a shift upwards of the consumption function, indicating a higher level of consumption at each level of disposable income. Therefore, the correct answer is option D, the consumption function will shift up.

If People's Real Assets Increase, Then The