If the consumption schedule shifts downward, and the shift was not caused by a tax change, then the saving schedule:
A) May shift either upward or downward
B) Will shift downward
C) Will shift upward
D) Will not shift

Question

Quizplus · Accepted Answer

If the consumption schedule shifts downward without tax changes, it means that people are spending less at each level of income. In turn, this implies that they will save more, leading to an upward shift in the saving schedule. Therefore, the best choice is C.

If the Consumption Schedule Shifts Downward, and the Shift Was