Which of the Following Is Evidence That Consumption Depends on Total

question 16

Multiple Choice

Which of the following is evidence that consumption depends on total wealth, and not just on current income?

• A) A series of phased- in tax cuts announced by the government causes little change in consumption.
• B) People save very little for their retirement.
• C) Banks will not always lend money to those who want to consume more than their income.
• D) The anticipation of future financial distress makes some people reluctant to borrow.
• E) A decrease in consumer confidence, with unchanged current income, often causes total consumption spending to fall.

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Definitions:

Need Categories

The classification of human needs into groups based on characteristics, such as physiological, safety, belonging, esteem, and self-actualization needs.

Psychological Needs

Fundamental human requirements that include the need for belonging, esteem, and self-actualization, which are essential for mental health and well-being.

Safety Needs

Refers to the psychological and physical security requirements that are considered essential for an individual's well-being and survival.

Social Needs

Fundamental human requirements for belonging, love, and affection that motivate behavior and influence social interactions and relationships.