An increase in taxes will cause the consumption schedule to
A)shift upward.
B)shift downward.
C)remain fixed as the economy moves upward along the schedule.
D)remain fixed as the economy moves downward along the schedule.

Question

Quizplus · Accepted Answer

An increase in taxes will decrease disposable income, which will lead to a decrease in consumption at every level of income. This shift downward in consumption schedule.

An Increase in Taxes Will Cause the Consumption Schedule to