Why Does an Increase in the Price Level Tend to Cause

question 56

Multiple Choice

Why does an increase in the price level tend to cause the consumption function to shift downward?

• A)An increase in the price level decreases disposable income.
• B)An increase in the price level increases the demand for fixed money assets.
• C)An increase in the price level decreases the value of fixed money assets.
• D)An increase in the price level decreases saving and increases debt.