Which of the following is true of the relationship between disposable income and consumption?
A)Disposable income and consumption are both dependent variables.
B)Disposable income and consumption are both independent variables.
C)Disposable income is the dependent variable and consumption is the independent variable.
D)Consumption is the dependent variable and disposable income is the independent variable.
E)Disposable income and consumption are negatively related to each other.

Question

Quizplus · Accepted Answer

Consumption is typically considered the dependent variable because it is influenced by disposable income. As disposable income increases, consumers may have more money to spend on goods and services, leading to an increase in consumption. Conversely, if disposable income decreases, consumers may have less money to spend, leading to a decrease in consumption. Therefore, disposable income is typically considered the independent variable in this relationship.

Which of the Following Is True of the Relationship Between