A decrease in consumer wealth will
A) not change autonomous consumption and rotate the consumption function upward.
B) not change autonomous consumption and rotate the consumption function downward.
C) increase autonomous consumption and shift the consumption function upward.
D) decrease autonomous consumption and shift the consumption function downward.

Question

Quizplus · Accepted Answer

A decrease in consumer wealth would lead to a decrease in autonomous consumption as consumers will have less disposable income. This would result in a shift of the consumption function downward as overall consumption would decrease.

A Decrease in Consumer Wealth Will