According to Keynes, what is the most important determinant of households' spending on goods and services?
A) Price levels.
B) Interest rates.
C) Autonomous consumption.
D) Disposable income.

Question

Quizplus · Accepted Answer

Keynes believed that disposable income is the most important determinant of households' spending on goods and services. This is because as households' disposable income increases, they are able to spend more on consumption goods and services, thus increasing overall aggregate demand in the economy. Price levels, interest rates, and autonomous consumption can also influence household spending, but they are not as significant as disposable income.

According to Keynes, What Is the Most Important Determinant of Households