Which of the Following Statements Is False

Multiple Choice

Which of the following statements is false?

A) The assumption that income is the only influence on consumption is a simplifying assumption.
B) Assuming consumption spending responds to income will improve a forecast.
C) The assumption that only consumption spending responds to income is a simplifying assumption.
D) Consumption responds to changes in other factors besides income.
E) The assumption that investment and net exports do not respond to changes in income is based on evidence from the U.S.economy.