The Two Parts of the Keynesian Consumption Function Are Consumption

question 120

Multiple Choice

The two parts of the Keynesian consumption function are consumption that depends on ________ and consumption that depends on ________.

• A)disposable income; factors other than disposable income
• B)planned spending; unplanned spending
• C)real income; nominal income
• D)money; wealth

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Definitions:

Present Value

The modern-day worth of an upcoming sum of money or series of cash receipts, factoring in a chosen rate of return.

Interest

The fee for the right to borrow money, usually stated as a yearly percentage rate.

Compounded Monthly

Describes an interest calculation method where interest is added to the principal sum of a deposit or loan each month, leading to interest on interest.

Annuity

A financial instrument designed to distribute a steady series of disbursements to a person, commonly utilized as a source of income during retirement.