The Theory of Consumption of Durable Goods

Multiple Choice

The theory of consumption of durable goods

A) is basically a theory of investment applied to households
B) states that durable goods purchases are very insensitive to interest rate changes
C) can be explained very well by the life-cycle theory, since people spread their durable goods purchases equally over their lifetimes
D) suggests that expenditures on durable goods do not increase utility as much as expenditures on other consumption goods
E) none of the above