In a Simple Macro Model, a Decrease in Households' Wealth

question 32

Multiple Choice

In a simple macro model, a decrease in households' wealth is generally assumed to

• A)cause an upward shift in the consumption function.
• B)affect only saving, not consumption.
• C)cause no change in consumption because consumption is a function of disposable income only.
• D)cause a downward shift in the consumption function.
• E)cause no change in consumption because the decline is always expected.