Sarah moves from Upperland, wh.
Sarah moves from Upperland, which has no taxes or transfer payments, to Lowerland, where she is hit with taxes of $2,000 and receives transfer payments of $3,000. She earns the same wage in both countries, but in Lowerland her disposable income is 1. $1,000 higher 2. $2,000 lower 3. $3,000 higher 4. $1,000 lower 5. $5,000 higher Which of the following would shift the consumption function upward? 1. an increase in net wealth 2. expectations of lower future prices 3. an increase in the interest rate 4. an increase in disposable income 5. a decrease in disposable income