Final answer:
In case of a decrease in household net wealth, the consumption function's autonomous consumption and/or the marginal propensity to consume typically decrease. The most likely adjusted consumption function reduces autonomous consumption. Therefore, Option C (C = 25 + 0.9(Y + TR - T)), with a lower level of autonomous consumption, is most likely the new consumption function.
Step-by-step explanation:
The student's question relates to how a household net wealth decrease would impact the consumption function for a closed economy. Given the original function C = 30 + 0.97 + TR-1), and without any other contextual information about the exact impact of wealth changes, we need to assume that a decrease in wealth would typically result in either a lower intercept (the autonomous consumption when income is zero), a lower marginal propensity to consume (MPC), or both. Autonomous consumption reflects the consumption level when income is zero, while the MPC reflects the change in consumption with each additional dollar of after-tax income earned.
Therefore, the most likely new consumption function, without any further specifics, would be Option C) C = 25 + 0.9(Y + TR - T), where the autonomous consumption has decreased in response to the decrease in household net wealth. Though the MPC has remained the same, it could also reasonably be expected to decrease under such economic conditions, which might make Option D) an alternative possibility.