AD- Consumer Expenditure Flashcards

1
Q

What is Consumer Expenditure

A

Spending by households on home produced goods and services

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2
Q

What are the factors that effect Consumer Expenditure

A

-Real Disposable Income
-Wealth
-Consumer Confidence and expectations
-Interest Rates
The age structure of the population
-The distribution of Income
-Savings
-Govt Policies

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3
Q

What is Real Disposable income and how does it affect Consumer Expenditure

A

It’s the available money consumers have after tax. The higher it is the higher the consumption will be.

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4
Q

What is Consumer Confidence and Expectations and how does it affect Consumer Expenditure

A

It’s the It’s how positive people are about the economic future. When people are optimistic about the future they spend more

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5
Q

What is Age Stucture and how does it affect Consumer Expenditure

A

How old the populations is as an average. Young people tend to spend more of their disposable income.

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6
Q

What is The Distribution of Income and how does it affect Consumer Expenditure

A

The Distribution of Income is how the wealth is distributed among the rich and the poor. The poor spend a much higher percentage of their income than the rich.

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7
Q

What is Savings and how does it affect Consumer Expenditure

A

Saving is when people put a proportion of their real disposable income into a bank. The more they save the less they have to spend on consumer expenditure.

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