A downward shift in the consumption function can be caused by:
A) expectations of higher inflation.
B) an increase in wealth.
C) a lower price level.
D) an increase in autonomous consumption.

Question

Quizplus · Accepted Answer

Expectations of higher inflation can lead to a downward shift in the consumption function because consumers might decide to save more in anticipation of higher future prices, reducing their current consumption.

A Downward Shift in the Consumption Function Can Be Caused