An increase in the price level, other things remaining the same, may be expected to result in ____ the consumption function.
A) a downward shift of
B) a movement along
C) an upward shift in
D) no effect on

Question

Quizplus · Accepted Answer

An increase in the price level leads to a decrease in real income and therefore, a decrease in consumption. This results in a downward shift of the consumption function.

An Increase in the Price Level, Other Things Remaining the Same