Which of the following could cause an increase in consumption?
A) Income decreases.
B) Interest rates increase.
C) Wealth increases.
D) Expected future income decreases.

Question

Quizplus · Accepted Answer

An increase in wealth could cause an increase in consumption. When people feel wealthier, they are more likely to spend money on discretionary items. A decrease in income or expected future income would likely lead to a decrease in consumption, while an increase in interest rates may discourage borrowing and spending.

Which of the Following Could Cause an Increase in Consumption