Which of the Following Statements About Consumption and Investment Is

Multiple Choice

Which of the following statements about consumption and investment is correct?

A) A temporary change in income will have a relatively larger effect on consumption than on investment.
B) A permanent change in income will have a relatively larger effect on consumption than on investment.
C) Consumption is more volatile than investment.
D) Investment and consumption exhibit approximately the same degree of volatility.
E) Investment is more volatile than consumption.