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❶Brumberg in their life cycle hypothesis, argue that people formulate their expenditure plans in accordance with their expected incomes over lifetime i. In the article Kalecki predicted that the full employment delivered by Keynesian policy would eventually lead to a more assertive working class and weakening of the social position of business leaders, causing the elite to use their political power to force the displacement of the Keynesian policy even though profits would be higher than under a laissez faire system:

The Importance of Consumption

What Is Keynesian Economics?
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BREAKING DOWN 'Consumer Spending'

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According to Keynesian macroeconomic theory, what is the most important determinant of households' spending on goods and services? Disposable income. Given the consumption equation C = $ billion + Y, an increase in disposable income from $6, billion to $7, billion will cause consumption to increase by.

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Keynes' criticism of the classical theory was that the Great Depression would not correct itself. The multiplier effect would restore an economy to full employment if A) government would follow a "least government is the best government" policy.

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Show transcribed image text According to Keynesian theory, what is the most important determinant of households' spending on goods and services? A. The price level B. The Interest rate C. Autonomous consumption D. Disposable income E. Government spending The consumption function shows the relationship between consumer %(1). Consumer spending can be regarded as opposed to personal saving. Many economists, especially those in the tradition of John Maynard Keynes, believe consumer spending is the most important short-run determinant of economic performance and is a primary component of aggregate demand.

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Consumer spending is the single most important driving force of the U.S. economy. Keynesian economic theory says that the government should stimulate spending to end a recession. Supply-side economists recommend the opposite. The formula was designed to show the relationship between real disposable income and consumer spending, the latter variable being what Keynes considered the most important determinant of short-term demand in an economy.