A movement along the consumption function is caused by a change in:
A) consumption.
B) expectations.
C) aggregate supply.
D) disposable income.

Question

Quizplus · Accepted Answer

A movement along the consumption function is caused by a change in disposable income. This is because the consumption function shows the relationship between consumption and disposable income, holding all other factors constant. Therefore, a change in disposable income will result in a movement along the consumption function, while changes in other factors such as expectations or aggregate supply will shift the consumption function.

A Movement Along the Consumption Function Is Caused by a Change