Keynes reasoned that consumer expenditure is most closely related to
A)the level of interest rates.
B)the price level.
C)disposable income.
D)the marginal tax rate.

Question

Quizplus · Accepted Answer

Keynes believed that consumer expenditure is primarily determined by disposable income, as households will increase their spending when they have more disposable income available to them. Interest rates, price levels, and marginal tax rates may also have some impact on consumer expenditure, but they are not considered to be as closely related as disposable income.

Keynes Reasoned That Consumer Expenditure Is Most Closely Related to