In the Keynesian model,the primary determinant of consumer spending is
A)the interest rate.
B)disposable income.
C)expectations of inflation.
D)the stage of the business cycle.

Question

Quizplus · Accepted Answer

In the Keynesian model, a key determinant of consumer spending is disposable income. When disposable income increases, consumers are more likely to spend more, and when it decreases, consumers tend to spend less. This is known as the consumption function in the Keynesian model, and it assumes that other factors, such as interest rates and inflation expectations, have a secondary impact on consumer spending.

In the Keynesian Model,the Primary Determinant of Consumer Spending Is