An increase in autonomous consumption
A)shifts the consumption function upward.
B)shifts the consumption function downward.
C)creates a movement downward along the consumption function.
D)creates a movement upward along the consumption function.
E)changes the slope of the consumption function.

Question

Quizplus · Accepted Answer

Autonomous consumption is the consumption which is independent of disposable income. An increase in autonomous consumption shifts the consumption function upward because regardless of the level of disposable income, the level of consumption will be higher.

An Increase in Autonomous Consumption