Chapter 28 - Consumption Flashcards
1
Q
What influences consumption
A
Disposable income, consumer confidence, interest rates, wealth effect, inflation, composition of households, the availability of credit.
2
Q
How to calculate the Marginal Prosperity to Consume?
A
MPC = Change in consumption / change in income
3
Q
Disposable income
A
Disposable income is total personal income minus personal current taxes.
4
Q
Durable goods
A
Goods that are consumed over a long period of time
5
Q
Non-durable goods
A
Goods that are consumed immediately
6
Q
Marginal prosperity to consume
A
Change in saving / change in income
7
Q
Dis-saving
A
The spending of a greater amount than available (in disposable income)
