Identify three autonomous factors that influence consumption spending. For each, provide an example of how it affects spending.
What will be an ideal response?
Answers will vary. Students should identify at least three factors, such as real wealth, the interest rate, household debt, expectations, or tastes and preferences. Students should also explain how each affects spending by providing an example. For example, for real wealth, students might mention that an increase in stock value would increase real wealth and likely increase the level of consumption. With interest rates, increases make it more expensive to buy things on credit and therefore reduce consumption spending. For expectations, consumers who see signs that the economy is expanding are more likely to increase household spending.
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Increases in the supply of scientists and engineers can increase the level of
a. investment. b. consumption. c. government spending. d. technology.
The primary determinant of the level of consumption and saving in the economy is the:
a. Level of income b. Interest rate c. Level of prices d. Level of investment
Since the 17th century, the United States has consistently ran a trade surplus in the export of ____________ products.
Fill in the blank(s) with the appropriate word(s).
When economists say that a good is nonexcludable, they mean that:
A. everybody wants it. B. there is no practical way to stop a person who does not pay from enjoying the good or service. C. more than one person can consume the good. D. everybody is willing to pay for it.