An upward shift in the consumption function, other things being equal, could be caused by households:
A) becoming optimistic about the state of the economy.
B) becoming pessimistic about the state of the economy.
C) expecting future income and wealth to decline.
D) experiencing a tax increase.

Question

Quizplus · Accepted Answer

If households become optimistic about the state of the economy, they are more likely to feel confident about their future income prospects and may increase their current consumption.

An Upward Shift in the Consumption Function, Other Things Being