In Germany, expected future income increased during 2010.This increase lead to
A) a movement upward along the consumption function.
B) a movement downward along the consumption function.
C) an upward shift of the consumption function.
D) a downward shift of the consumption function.
E) no movement along the consumption function and no shift of the consumption function.

Question

Quizplus · Accepted Answer

An increase in expected future income leads to an increase in autonomous consumption, resulting in an upward shift of the consumption function. Therefore, the correct option is C.

In Germany, Expected Future Income Increased During 2010