Which one of the following will shift the consumption function downward?
A) an increase in disposable income
B) a decrease in disposable income
C) legislation making credit harder to obtain
D) lower tax rates

Question

Quizplus · Accepted Answer

Legislation making credit harder to obtain would reduce consumers' ability to spend, thus shifting the consumption function downward. This is because with less access to credit, people are likely to spend less on goods and services.

Which One of the Following Will Shift the Consumption Function