The relationship between consumption and disposable income is very unreliable and unpredictable.

Question

Quizplus · Accepted Answer

The relationship between consumption and disposable income is generally positive i.e. as disposable income increases, consumption also increases (up to a certain extent). This relationship is one of the fundamental principles of economics and is supported by empirical evidence. However, there may be some other factors (such as changes in interest rates, government policies, etc.) that can affect consumption and make it unpredictable.

The Relationship Between Consumption and Disposable Income Is Very Unreliable