The factors that affect consumer spending are: Size of Income, Future Expenditures, and Social Influences.
In a free enterprise economy, the consumer economic decisions can affect the price and supply of a commodity. When the consumers show interest in a product (demand), there will be an increase in the number of producers willing to supply it.
[If the Federal Reserve is selling bonds, banks will have lower reserves due to decreased deposits. With the decreased reserves, they will have to decrease the number and size of loans. The decrease in loans and the resulting higher interest rates discourage business (and consumer) borrowing and spending. The decreased spending in the economy should result in decreased business production and employment.]
Increases purchases from producers
If you have more then you can spend more unless you chose to save it
The factors that affect consumer spending are: Size of Income, Future Expenditures, and Social Influences.
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In a free enterprise economy, the consumer economic decisions can affect the price and supply of a commodity. When the consumers show interest in a product (demand), there will be an increase in the number of producers willing to supply it.
[If the Federal Reserve is selling bonds, banks will have lower reserves due to decreased deposits. With the decreased reserves, they will have to decrease the number and size of loans. The decrease in loans and the resulting higher interest rates discourage business (and consumer) borrowing and spending. The decreased spending in the economy should result in decreased business production and employment.]
Increases purchases from producers
If you have more then you can spend more unless you chose to save it
optimism can lead to increased consumer spending and greater business productivity.Pessimism can make people more cautious,reducing consumer spending.
Factors influencing consumption expenditure include income levels, consumer confidence, interest rates, inflation, and cultural factors. Changes in any of these factors can affect consumer spending patterns and overall consumption levels in the economy.
They help increase cash flow.
When inflation increase
Federal spending on forgein aid increased demand for U.S goods.
An increase in total expenditures affect the nation's economy would cause an expansion.