Suppose the Consumption Function Equaled C = 2

question 160

Multiple Choice

Suppose the consumption function equaled C = 2 + .7.If taxes and government purchases each decreased by $10 billion,the expenditure line would

• A)shift down by $20 billion.
• B)shift up by $7 billion.
• C)shift up by $20 billion.
• D)shift down by $3 billion.
• E)not change.