Question

Which of the following is likely to shift the consumption schedule downwards?
1. Expectations of a fall in interest rates
2. Consumer prices are expected to fall
3. Currently less stock of durable goods in the possession of consumers
4. The expectation of a future rise in the consumer price index

Answer 1

Which of the following is likely to shift the consumption schedule downwards? 

4. The expectation of a future rise in the consumer price index

When consumers expect economic conditions to worsen, they will reduce their consumption.