Figure 11-3

-In Figure 11-3, which line represents the change in the consumption schedule caused by a cut in fixed taxes?
A)C₁ in graph (a)
B)C2 in graph (a)
C)C₁ in graph (b)
D)C2 in graph (b)

Question

Figure 11-3
 
-In Figure 11-3, which line represents the change in the consumption schedule caused by a cut in fixed taxes?
A)C₁ in graph (a) 
B)C2 in graph (a) 
C)C₁ in graph (b) 
D)C2 in graph (b)

Quizplus · Accepted Answer

A cut in fixed taxes increases disposable income, leading to an upward shift in the consumption schedule. C2 in graph (a) represents this upward shift.

Figure 11-3 -In Figure 11-3, Which Line Represents the Change in the the Change