Changes in the subjective or objective factors
A)Never affect consumption function
B)Always cause downward shift in consumption function
C)Always cause upward shift in consumption function
D)They cause upward or downward shifts in consumption function

Question

Quizplus · Accepted Answer

Changes in subjective or objective factors can affect consumer confidence, income expectations, wealth, interest rates, and other variables, leading to either an increase or decrease in consumption at various levels of income. This variability means the consumption function can shift both upward or downward depending on the nature of the change.

Changes in the Subjective or Objective Factors