The most important determinant of consumer spending is:
A)the level of household debt.
B)consumer expectations.
C)the stock of wealth.
D)the level of disposable income.

Question

Quizplus · Accepted Answer

Disposable income refers to the amount of income that households have available to spend after taxes and other necessary expenses are paid. This is the most important determinant of consumer spending because if households have more disposable income, they are able to spend more on goods and services. Consumer expectations, household debt, and the stock of wealth can also have an impact on consumer spending, but these factors typically have a secondary role in determining overall levels of spending.

The Most Important Determinant of Consumer Spending Is