Other things equal, expectations of lower income would _____ and shift the consumption function _____.
A)increase autonomous consumption; up
B)increase autonomous consumption; up.
C)decrease the marginal propensity to consume; down.
D)decrease the marginal propensity to consume; down
E)decrease autonomous consumption; down.
F)decrease autonomous consumption; down
G)increase the marginal propensity to consume; up.
H)increase the marginal propensity to consume; up

Question

Quizplus · Accepted Answer

Expectations of lower income would decrease household confidence and cause them to reduce their spending, which would decrease autonomous consumption and shift the consumption function down.

Other Things Equal, Expectations of Lower Income Would _____ and Shift