Assume the economy's consumption and saving schedules simultaneously shift downward. This must be the result of
A) an increase in disposable income.
B) an increase in household wealth.
C) an increase in personal taxes.
D) the expectation of a recession.

Question

Quizplus · Accepted Answer

A decrease in consumption and saving schedules can be caused by an increase in personal taxes, which would reduce disposable income and incentivize individuals to save more. An increase in disposable income or household wealth would likely result in an increase in consumption and savings. The expectation of a recession may also lead to a decrease in consumption and savings, but this is not indicated in the question.

Assume the Economy's Consumption and Saving Schedules Simultaneously Shift Downward