Consumption Flashcards
1
Q
what will happen to consumption if unemployment falls?
A
consumers are less afraid that they will lose their jobs and therefore are more willing to spend on consumer durables
2
Q
disposable income
A
amount of income left over after taxes have been removed
3
Q
how much does consumption make up of AD in the UK?
A
approx 60%
4
Q
how much does consumption make up of AD in Ireland?
A
23%
5
Q
how much does consumption make up of AD in Switzerland?
A
50%
6
Q
where can income from?
A
wages (hourly), salary (anually), savings, pensions, benefits, investments
7
Q
consumption function
A
number of factors which determine how much a household consumes
8
Q
marginal propensity to consume
A
change in consumption / change in income
