A movement along the consumption function shows the change in consumption expenditure as a result of a change in
A) disposable income.
B) the price level.
C) the interest rate.
D) saving.
E) net taxes.

Question

Quizplus · Accepted Answer

The consumption function relates the level of consumption expenditure to the level of disposable income. Therefore, a movement along the consumption function shows the change in consumption expenditure as a result of a change in disposable income.

A Movement Along the Consumption Function Shows the Change in Consumption