Which of the Following Is a Basic Point That Keynes

question 1

Multiple Choice

Which of the following is a basic point that Keynes made about consumption?

• A) Consumption and disposal income are inversely related.
• B) When disposable income changes,consumption changes by a greater amount.
• C) Consumption is dependent upon disposable income.
• D) b and c
• E) all of the above

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Definitions:

EAFE Index

An index that measures the stock market performance of developed markets outside of the United States and Canada.

Non-U.S. Stocks

Shares of companies based outside of the United States, often used to diversify investment portfolios.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between risk and expected return for assets, particularly stocks.

Exchange-Rate Risk

The potential for investors to experience losses due to changes in the exchange rate between two currencies in their foreign investment transactions.