-Refer to Figure 11-3.Which of the following could explain the shift from C₁ to C₂? A) An increase in disposable income B) An increase in net taxes that increases the marginal propensity to consume C) A decrease in net taxes that increases the marginal propensity to consume D) An increase in net taxes that increases autonomous consumption spending E) A decrease in net taxes that increases autonomous consumption spending

Question

Quizplus · Accepted Answer

A decrease in net taxes increases autonomous consumption spending, leading to a shift from C1 to C2.