AD- Consumer Expenditure

Question 1

What is Consumer Expenditure

Answer 1

Spending by households on home produced goods and services

Question 2

What are the factors that effect Consumer Expenditure

Answer 2

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

Question 3

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

Answer 3

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

Question 4

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

Answer 4

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

Question 5

What is Age Stucture and how does it affect Consumer Expenditure

Answer 5

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

Question 6

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

Answer 6

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.

Question 7

What is Savings and how does it affect Consumer Expenditure

Answer 7

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.