If disposable income decreases during a recession, there is
A) a downward shift in the consumption function.
B) movement downward along the consumption function.
C) no change in consumption expenditures.
D) an upward shift in the consumption function.
E) movement upward along the consumption function.

Question

Quizplus · Accepted Answer

A decrease in disposable income during a recession leads to a movement downward along the consumption function, as people consume less due to having less income available.

If Disposable Income Decreases During a Recession, There Is