What is the most important determinant of the level of consumption?
A)The level of prices.
B)Consumer expectations.
C)The stock of wealth.
D)The level of income.

Question

Quizplus · Accepted Answer

The level of income is the most important determinant of the level of consumption. As income increases, people have more money to spend and tend to consume more. On the other hand, if income decreases, people tend to reduce their consumption. The other options, such as prices, consumer expectations, and wealth stock, can affect consumption as well, but their impact is usually less significant than the level of income.

What Is the Most Important Determinant of the Level of Consumption