According to the Keynesian Consumption Function,an Increase in Disposable Income

question 88

Multiple Choice

According to the Keynesian consumption function,an increase in disposable income will result in

• A) a decrease in consumption.
• B) an increase in consumption.
• C) a decrease in investment.
• D) an increase in investment.

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Definitions:

Cost Object

Anything for which cost data is collected and analyzed, including products, services, departments, and activities.

Product Costs

Costs that are incurred to acquire or manufacture a product, which typically include direct materials, direct labor, and manufacturing overhead.

Direct Labor

The cost of wages for employees who are directly involved in the production of goods or services.

Direct Materials

Refers to the raw materials that are directly incorporated into a finished product during the manufacturing process.