Other Things Remaining the Same, If Households Become More Frugal

Multiple Choice

Other things remaining the same, if households become more frugal and decide to spend less at each level of income, then the consumption function will:

A) become less steep because the MPS rises.
B) remain unchanged but the savings function will shift downward.
C) become steeper because the MPC falls.
D) make a parallel shift downward.