The most important determinant of a household's consumption spending is:
A)its disposable income.
B)the in-kind transfers received by the household.
C)the level of education of the members of the household.
D)the interest rate.
E)the ratio of wage to non-wage income of the household.

Question

Quizplus · Accepted Answer

Disposable income is the amount of income a household has to spend or save after taxes have been paid. Therefore, it is the most important determinant of a household's consumption spending. As disposable income increases, households tend to increase their consumption spending, and as disposable income decreases, households tend to decrease their consumption spending.

The Most Important Determinant of a Household's Consumption Spending Is