Since 1970, U.S. consumption function has generally shifted _________because of_________ .
A) upward; higher real interest rates
B) downward; higher real interest rates
C) upward; higher expected future income and rising wealth
D) downward; falling wealth

Question

Quizplus · Accepted Answer

The consumption function measures the relationship between disposable income and consumption, indicating how much of an increase in income will result in an increase in consumer spending. Since 1970, the U.S. consumption function has generally shifted upward because of higher expected future income and rising wealth, leading to increased spending.