Economics - Real Income

Question 1

Real Income

Answer 1

measures the amount of disposable income available to consumers
e.g. households and individuals

Question 2

factors that effect real incomes

Answer 2

• price inflation
• wage growth
• employment levels
• interest rates
• govt. tax policy

Question 3

(real incomes are closely linked to market demand)

Factors that Effect Demand

Answer 3

-real disposable income
-employment and job security
(consumer confidence and incomes increase)
-household wealth
-expectations and sentiment
(economic uncertainty causes spending to fall, weakening demand)
-market interest rates
(interest rates affect both saving and cost of borrowing)

Question 4

Real Disposable Income

Answer 4

how much households have available to spend