What Is the Effect on the Consumption Function of a Decrease

question 117

Multiple Choice

What is the effect on the consumption function of a decrease in disposable income?

• A)The consumption function shifts upward.
• B)The consumption function shifts downward.
• C)There is movement upward along the consumption function.
• D)There is movement downward along the consumption function.
• E)The consumption function becomes flatter.

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Definitions:

A State

In psychology, a temporary emotional or mental condition in contrast to more stable traits.

Intensity

The level of force, strength, or magnitude of a particular stimulus or action.

Opponent Process Theory

Proposes that emotions are regulated by mechanisms that operate in opposition to each other, restoring emotional balance after disturbances.

Addiction

An ongoing, recurrent illness marked by an uncontainable desire for drug consumption, consistent usage in spite of detrimental outcomes, and permanent shifts in brain structure.