Empirical Studies of Aggregate Consumption Have Shown That

Multiple Choice

Empirical studies of aggregate consumption have shown that

A) 100% of the variation in consumption can be explained by changes in current income
B) wealth effects generally account for only a small amount of consumer expenditures
C) wealth effects generally are very large, which explains the large variations in consumption from year to year
D) changes in wealth have a bigger impact on consumption than changes in income
E) the marginal propensity to consume out of wealth is close to one