The Consumption Relationship in This Chapter Assumes That Interest and Wealth

Multiple Choice

The consumption relationship in this chapter assumes that interest and wealth do not affect consumption

A) because the interest rate effect cancels out the wealth effect.
B) in order to keep the analysis manageable at this stage.
C) because economists do not understand how interest rates and wealth affect consumption.
D) because interest rates and wealth have little effect on consumption.
E) because data on interest rates and wealth are hard to acquire