Consumption Flashcards
1
Q
What is the wealth effect
A
when a change in the value of an asset causes individuals to feel more or less wealthy
2
Q
what are some effects of the wealth effect
A
change in consumer confidence
borrow more or less
consume more or less
shift in AD
3
Q
what is consumption
A
the total spending of UK households on goods and services for their own private use
4
Q
what can cause a change in consumption
A
interest rates
income tax
consumer confidence
change in real wages/incomes
