Which of the following would lead you to predict an upward shift in the consumption function?

Question

Quizplus · Accepted Answer

An increase in the value of real wealth will lead to a higher consumption function since people feel wealthier and are more likely to spend. Conversely, a decrease in the value of real wealth (choice A) would likely lead to a decrease in the consumption function. A decrease in disposable income (choice B) would also lead to a decrease in the consumption function since people have less money to spend. An increase in the price level (choice D) would lead to a decrease in the purchasing power of consumer's incomes, and thus a decrease in the consumption function.

Which of the Following Would Lead You to Predict an Upward