Introduction to Economics 2 Deneme Sınavı Sorusu #349531
Which of the following is not the factor that influences the consumption decisions of households?
Wealth
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Autonomous Investments
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Disposable income
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Demographic Factors
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Expectations |
There are different factors that influence the consumption decisions of households. The main factor that determines consumption expenditures is income level and there is a positive relationship between consumption and income as indicated by the consumption function. In principle, the income of households is measured by current disposable income. Secondly, wealth is the value of all assets that households have. Another important factor for determining consumption is the expectations about future income, prices and wealth. When the other factors effecting consumption are assumed to be constant, an increase in population will increase consumption expenditures.
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