An Upward Shift in the Consumption Function Can Be Caused

question 22

Multiple Choice

An upward shift in the consumption function can be caused by

• A) expectations of product shortages.
• B) expectations of less income in the future.
• C) a decrease in consumer confidence.
• D) a reduction in the wealth of households.

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Definitions:

Pre-tax Cost

The expense or cost associated with an investment or project before any taxes are deducted.

Marginal Tax Rate

The rate at which your last dollar of income is taxed, indicating the percentage of tax applied to your next dollar of taxable income.