Pat Robertson, a TV evangelist and former Republican Party candidate for president, once said that "debt is an affront to God," so good Christians should not spend beyond their incomes.Indeed, Robertson wants Christians to save more.If more Americans, Christians as well as others, took his message seriously, how would we represent the result using a Keynesian macroeconomic model?
A)a downward movement along the consumption function
B)an upward movement along the consumption function
C)a downward shift of the consumption function
D)an upward shift of the consumption function

Question

Pat Robertson, a TV evangelist and former Republican Party candidate for president, once said that "debt is an affront to God," so good Christians should not spend beyond their incomes.Indeed, Robertson wants Christians to save more.If more Americans, Christians as well as others, took his message seriously, how would we represent the result using a Keynesian macroeconomic model?
A)a downward movement along the consumption function 
B)an upward movement along the consumption function 
C)a downward shift of the consumption function 
D)an upward shift of the consumption function

Quizplus · Accepted Answer

According to Keynesian economics, if more individuals increase their savings and reduce their consumption, then the aggregate expenditure in the economy will decrease. This would lead to a downward shift of the consumption function, since at any given income level, people would be willing to consume a lower amount. This would then result in a decrease in equilibrium output and employment levels in the short run. Therefore, the best answer is "a downward shift of the consumption function."

Pat Robertson, a TV Evangelist and Former Republican Party Candidate