The five most important variables that determine the level of ________ are disposable income, wealth, expected future income, price level, and interest rate.
A)consumption
B)government purchases
C)planned investment
D)net exports
E)public savings

Question

Quizplus · Accepted Answer

The five variables listed are all important factors that affect consumption, or the amount of goods and services that individuals and households choose to purchase. Disposable income refers to the amount of income that individuals have after taxes and other deductions, and is a major determinant of consumption. Wealth also plays a role in consumption, as individuals with higher levels of wealth may be more likely to spend money on luxury goods or other items. Expected future income can also affect consumption, as people may be more likely to spend money if they expect to have higher incomes in the future. The price level and interest rate can also influence consumption, as higher prices or interest rates may reduce individuals' purchasing power and limit the amount they choose to spend.

The Five Most Important Variables That Determine the Level of ________