Last year, the Parker family used to eat at nice restaurants almost four times a week. Even though Mr. Parker received a 2 percent pay raise, the cost of living rose by 4 percent and property taxes went up 5% in their community. As a result, the family now eats most of their meals at home, dining out only a few times a month. This reflects
A. a reaction to a loss of discretionary income.
B. a decrease in the number of fine restaurants that can stay in business during times of economical downturn.
C. a significant drop in disposable income since there was a negative gain in income.
D. a rise in deflation.
E. a shift from spending to investing.
Answer: A
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