Which of the following changes will shift the consumption function upward?
A) an increase in wealth
B) a decrease in wealth
C) a decrease real disposable income
D) an increase in real disposable income

Question

Quizplus · Accepted Answer

An increase in wealth will lead to an increase in consumption, thus shifting the consumption function upward. A decrease in wealth and a decrease in real disposable income will shift the consumption function downward, and an increase in real disposable income will cause a movement along the consumption function, but will not shift it upward.

Which of the Following Changes Will Shift the Consumption Function