The relationship between real consumption spending and real disposable income
A) is direct.
B) is inverse.
C) plots a vertical line.
D) plots a horizontal line.

Question

Quizplus · Accepted Answer

Real consumption spending and real disposable income have a direct relationship because as disposable income increases, consumers have more money to spend on goods and services, leading to an increase in consumption spending. Conversely, a decrease in real disposable income would lead to a decrease in consumption spending.

The Relationship Between Real Consumption Spending and Real Disposable Income