Discuss, in the light of macroeconomic consumption and investment functions. When individuals consider the most efficient means of distributing disposable income a wide range of factors must be considered. A high priority must be given to considering the likely effect of future occurrences. Indeed many circumstances can force individuals (e.g. a consumer, business manager, entrepreneur etc) to budget a greater amount than normal to consumption expenditure as opposed to investment expenditure or vice versa. Firstly, we will consider what expectations may result in an individual budgeting a greater amount to consumption whilst allocating a substandard amount to investment. The current income hypothesis states that current income is the main determinant of consumption

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