The Keynesian consumption function does not display consumption smoothing,because ________.
A)the average propensity to consume rises with income
B)the marginal propensity to consume is constant
C)consumption is not affected by the real interest rate
D)consumption is not affected by future income

Question

Quizplus · Accepted Answer

The Keynesian consumption function assumes that consumption is determined by current income and does not take into account future income or the need for consumption smoothing. Therefore, the answer is D, as the Keynesian consumption function does not consider the effect of future income on consumption.

The Keynesian Consumption Function Does Not Display Consumption Smoothing,because ________