A Downward Shift in the Consumption Function Can Be Caused

question 165

Multiple Choice

A downward shift in the consumption function can be caused by

• A) expectations of product shortages.
• B) expectations of more income in the future.
• C) a decrease in consumer confidence.
• D) rising property values that increases households' net worth.

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Definitions:

Paid-in Capital

The amount of money a company has received from shareholders in exchange for shares of stock.

Stock Dividend

A dividend payment made in shares of the company's stock rather than cash.

Retained Earnings

The portion of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business, or to pay debt.

Plant Expansion

The process of increasing the capacity or capabilities of existing facilities through additional space, equipment, or technology.