The Consumption Relationship in This Chapter Assumes That Interest and Wealth

question 15

Multiple Choice

The consumption relationship in this chapter assumes that interest and wealth do not affect consumption

• A)because the interest rate effect cancels out the wealth effect.
• B)in order to keep the analysis manageable at this stage.
• C)because economists do not understand how interest rates and wealth affect consumption.
• D)because interest rates and wealth have little effect on consumption.
• E)because data on interest rates and wealth are hard to acquire

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