Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

If a government raises the unemployment benefit rate, which diagram illustrates the resulting shift in the consumption function from C1 to C2?

  • ADiagram A (C2 above and parallel to C1)
  • BDiagram B (C2 above C1, shifted upwards)
  • CDiagram C (C2 below C1)
  • DDiagram D (C1 and C2 intersecting)

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