The most important determinant of consumption and saving is the:
A)level of bank credit.
B)level of disposable income.
C)interest rate.
D)price level.

Question

Quizplus · Accepted Answer

Disposable income is the amount of income that is available to be spent or saved after taxes and other mandatory expenses have been deducted. As such, it is the most important determinant of consumption and saving, as the level of disposable income will directly affect how much individuals have available to spend and save. The other choices - level of bank credit, interest rate, and price level - can also have an impact on consumption and saving, but they are not as directly tied to individuals' ability to spend and save as disposable income.

The Most Important Determinant of Consumption and Saving Is The