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.

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Definitions:

Total Assets

This financial metric represents the sum of all resources owned by an entity, valued in monetary terms.

Current Liabilities

Obligations that a company needs to pay off within a year, including accounts payable, short-term loans, and accrued expenses.

Total Equity

The total net value of a company, calculated as total assets minus total liabilities; represents the owners' stake in the company.

Total Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing total liabilities by total assets.