How is household consumption primarily determined?
Understand the Problem
The question is asking us to identify the primary determinant of household consumption among a list of options, focusing on economic factors like income, wealth, and government policies.
Answer
Disposable personal income primarily determines household consumption.
Household consumption is primarily determined by disposable personal income.
Answer for screen readers
Household consumption is primarily determined by disposable personal income.
More Information
Disposable personal income is the amount of money that individuals have available for spending and saving after income taxes have been accounted for. It's a crucial indicator of the potential consumption in a household.
Tips
A common mistake is assuming consumption is only influenced by current income, when future income expectations and wealth might also play roles.
Sources
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