In the Keynesian model consumption is primarily determined by __________ and investment is primarily determined by __________.
A) the price level; income
B) income; the interest rate
C) income; the price level
D) the interest rate; income

Question

Quizplus · Accepted Answer

In the Keynesian model, consumption is primarily determined by income, as individuals tend to spend more as their income increases. Investment, on the other hand, is primarily determined by the interest rate, as lower interest rates make it cheaper for firms to borrow money for investment projects.

In the Keynesian Model Consumption Is Primarily Determined by __________