Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1
-Refer to Figure 8.1. An increase in the amount of consumption this household makes when this household's income is zero
A) makes the consumption function steeper.
B) makes the saving function flatter.
C) shifts the consumption function downward.
D) shifts the saving function downward.

Question

Refer to the information provided in Figure 8.1 below to answer the questions that follow.  Figure 8.1
-Refer to Figure 8.1. An increase in the amount of consumption this household makes when this household's income is zero
A) makes the consumption function steeper. 
B) makes the saving function flatter. 
C) shifts the consumption function downward. 
D) shifts the saving function downward.

Quizplus · Accepted Answer

An increase in consumption when income is zero implies higher autonomous consumption, which reduces savings at zero income, shifting the saving function downward.

Refer to the Information Provided in Figure 8