Explain the determinants of consumption

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Reference no: EM132199547

Question -

1. Discuss the plausibility of the importance of (very) forward-looking behavior for current decisions. In your discussion, refer specifically to the know ability of the future and the capacity of agents (consumers, workers and capitalists) to discount the future.

2. Explain the determinants of consumption (current after-tax income, wealth, debt, and present value of expected income). Why do they matter?

3. Explain the determinants of investment (sales/income, interest rate, profit rate (profit per unit of capital), and present value of expected profits). Why are they important?

Reference no: EM132199547

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