-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 flatter.
B) shift upward.
C) become steeper.
D) shift downward.

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 flatter. 
B) shift upward. 
C) become steeper. 
D) shift downward.

Quizplus · Accepted Answer

An increase in autonomous consumption shifts the consumption function upward, as it increases the level of consumption at all levels of income.

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