What does empirical evidence suggest about consumption?
A)It decreases with any tax cut.
B)It increases with an increase in income.
C)It decreases with any increase in income.
D)It increases with any decrease in consumer confidence.

Question

Quizplus · Accepted Answer

Empirical evidence suggests that consumption tends to increase with an increase in income, as people have more purchasing power and disposable income. This relationship is supported by various economic theories, including the Keynesian consumption function.

What Does Empirical Evidence Suggest About Consumption