When one observes consumption and investment patterns over time, one finds that:
A) like consumption, investment is fairly stable over time.
B) like consumption, investment is fairly erratic over time.
C) unlike consumption, which is fairly stable over time, investment is subject to erratic fluctuations.
D) unlike consumption, which is subject to erratic fluctuations, investment is fairly stable over time.

Question

Quizplus · Accepted Answer

Consumption is typically more stable over time because it is driven by the steady demand for goods and services necessary for daily life. Investment, on the other hand, is subject to fluctuations in economic conditions, such as changes in interest rates or shifts in investor confidence. Therefore, investment tends to be more erratic over time.

When One Observes Consumption and Investment Patterns Over Time, One