Which of the following would cause the consumption function to shift down?
A) A decrease in disposable income
B) A decrease in taxes
C) An increase in taxes
D) An increase in the marginal propensity to consume
E) None of the above

Question

Quizplus · Accepted Answer

An increase in taxes reduces disposable income, leading to a decrease in consumption, causing the consumption function to shift down.

Which of the Following Would Cause the Consumption Function to Shift