An increase in stock prices will be a(n)
A)movement along the consumption function.
B)movement down along the consumption function.
C)downward shift of the consumption function.
D)upward shift of the consumption function.

Question

Quizplus · Accepted Answer

An increase in stock prices typically leads to an increase in wealth for investors, which can boost consumer confidence and spending. This is represented by an upward shift of the consumption function, as it indicates an increase in consumption at each level of income, not just a movement along the existing curve.

An Increase in Stock Prices Will Be A(n)