If the consumption schedule shifts upward and the shift was not caused by a tax change, the saving schedule
A) will not shift.
B) may shift either upward or downward.
C) will shift downward.
D) will also shift upward.

Question

Quizplus · Accepted Answer

If the consumption schedule shifts upward (indicating higher levels of consumption at each income level), it means that households are saving less at each income level. Therefore, the saving schedule will shift downward. This is due to the fact that the two schedules are complementary and inversely related to each other.

If the Consumption Schedule Shifts Upward and the Shift Was