Which of the following supports the Keynesian argument that interest rates have no effect on consumption?
A)Consumers find it difficult to adjust their spending habits.
B)Higher interest rates will decrease the demand for consumer loans but increase consumer saving.
C)Interest rates are inflexible because of monopoly power in the economy.
D)Autonomous consumption is usually zero in most modern economies.

Question

Quizplus · Accepted Answer

Consumers finding it difficult to adjust their spending habits supports the Keynesian argument that interest rates have no effect on consumption, as it suggests that consumption decisions are more influenced by habits or other factors rather than changes in interest rates.

Which of the Following Supports the Keynesian Argument That Interest