When the Economy Enters an Expansion of a Business Cycle

Multiple Choice

When the economy enters an expansion of a business cycle, households become more optimistic about expected future disposable income. The increase in optimism leads to

A) a shift upward of the consumption function.
B) a movement downward along the consumption function.
C) a movement upward along the consumption function.
D) an increase in consumption expenditures.
E) no change in the level of consumption expenditures.