A movement along the consumption function to higher levels of consumption expenditure arises because
A) the level of disposable income decreases.
B) the level of disposable income increases.
C) household wealth rises.
D) the level of desired saving rises.

Question

Quizplus · Accepted Answer

A movement along the consumption function to higher levels of consumption expenditure arises because the level of disposable income increases. As the disposable income of households increases, their consumption expenditure also increases, leading to a movement along the consumption function to higher levels of expenditure.

A Movement Along the Consumption Function to Higher Levels of Consumption