Consumer Expenditure Flashcards
What is wealth?
A stock of assets
E.g of assets
Car, House, Yacht, Shares
What is consumer confidence?
How confident consumers are about future economic prospects
How can the government give wealth to consumers?
Selling part of a state owned company for a cheap price, the shares then give wealth to people
What does Real mean in terms of money?
Having removed the effects of inflation
What type of people do and don’t save and why?
Young people - spend a high proportion of their income rather than saving it because they don’t earn that much so what they do earn needs to be spent on living
Old people - Also spend a lot because they don’t usually have an income and have spend their whole lives saving and own a lot of assets
Wealthy people - save a lot because they get a high income and don’t need to spend all of it to survive so they save a lot for retirement
What is inflation?
A sustained rise in the price level over a period of time
What happens for consumers when interest rates fall?
Borrowing becomes cheaper
Reduced incentive to save
Reduced mortgage repayments
What is Real Disposable Income?
Real disposable income is the post tax and benefit income available to households
