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

question 17

Multiple Choice

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

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