What is the most important determinant of a household's consumption spending?
A) its disposable income
B) its total wealth
C) the number of persons in the household
D) its net wealth

Question

What is the most important determinant of a household's consumption spending?  
A) its disposable income 
B) its total wealth 
C) the number of persons in the household 
D) its net wealth

Quizplus · Accepted Answer

Disposable income is the most important determinant of a household's consumption spending because it represents the income that is available for spending after taxes and other expenses have been paid. Total wealth and net wealth may have some impact on consumption, but disposable income captures the most immediate and direct influence on spending. The number of persons in the household may also affect consumption, but this is typically reflected in the level of disposable income rather than being a separate determinant.

What Is the Most Important Determinant of a Household's Consumption