-In the above figure, a change in autonomous consumption to $4 trillion with no change to the MPC would cause the consumption function to
A) become steeper.
B) become flatter.
C) exhibit a parallel shift downward.
D) exhibit a parallel shift upward.

Question

-In the above figure, a change in autonomous consumption to $4 trillion with no change to the MPC would cause the consumption function to
A) become steeper. 
B) become flatter. 
C) exhibit a parallel shift downward. 
D) exhibit a parallel shift upward.

Quizplus · Accepted Answer

A change in autonomous consumption, with no change to the marginal propensity to consume (MPC), results in a parallel shift of the consumption function. If autonomous consumption increases, the shift is upward.

-In the Above Figure, a Change in Autonomous Consumption to $4