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15 August, 04:56

The consumption function will shift down if:

a. households expect an increase in the minimum wage in the future.

b. the marginal propensity to save decreases.

c. the marginal propensity to consume increases.

d. households expect a decrease in the minimum wage in the future.

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Answers (1)
  1. 15 August, 05:03
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    The correct answer is option d.

    Explanation:

    The consumption function shows the relationship between income level and consumption. It includes autonomous consumption that does not depends on the income level, marginal propensity to consume, and income level.

    The consumption function shifts because of a change in the expectations of the consumers. If consumers expect the minimum wage to decrease in future, the consumption function will shift downwards.
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Home » Business » The consumption function will shift down if: a. households expect an increase in the minimum wage in the future. b. the marginal propensity to save decreases. c. the marginal propensity to consume increases. d.
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