Consumption functions would shift downward if
A)disposable incomes fall.
B)disposable incomes rise.
C)price levels fall.
D)price levels rise.

Name: Consumption functions would shift downward if A)disposable incomes fall. B)disposable incomes rise. C)price levels fall. D)price levels rise.
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Question

Quizplus · Accepted Answer

A rise in price levels decreases the real purchasing power of consumers, leading to a downward shift in the consumption function as consumers are likely to spend less.

Consumption Functions Would Shift Downward If