The most important determinant of a household's consumption spending is
A)its disposable income
B)its total wealth
C)the number of persons in the household
D)its net wealth
E)the ratio of wage to nonwage income the household earns

Question

Quizplus · Accepted Answer

Disposable income is the income that a household earns after taxes and transfers. Therefore, it represents the actual amount of money that a household has available to spend. Hence, it is the most crucial determinant of consumption spending.

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