The Consumption Function Relates

question 416

Multiple Choice

The consumption function relates

• A)a household's consumption to its wealth.
• B)planned household consumption to real disposable income.
• C)planned household consumption and real interest rates.
• D)real disposable incomes earned by households with the level of consumption credit desired in the economy.

---

Definitions:

Output Effect

The impact on total production in the economy resulting from changes in price levels, often analyzed in the context of supply and demand shifts.

Price Effect

The impact on consumer behavior and market demand resulting from a change in the price of a good or service, influencing buying decisions.

Oligopolist

A firm or individual that is part of a market structure in which a few companies control the majority of market sales.

Collude

When two or more firms work together to control a market, set prices, or limit production, often in ways that defy competitive principles or regulations.