Question

The Keynsian model assumes the major determinant of consumption spending is the interest rate.

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Answer 1

The Keynesian model assumes that consumption spending is primarily determined by income, not the interest rate.

Step-by-step explanation:

The question is about the Keynesian model, which falls under the subject of Economics in the field of Social Studies. The Keynesian model is an economic theory that focuses on the relationship between consumption spending, income, and the interest rate.

In the Keynesian model, consumption spending is influenced by several factors, including income, interest rates, and household preferences. However, it does not assume the interest rate to be the major determinant of consumption spending. Rather, it considers income as the major determinant.

Therefore, the statement 'The Keynesian model assumes the major determinant of consumption spending is the interest rate' is false.