2.2.2Consumption

Question 1

Consumer spending

Answer 1

How much consumers spend on goods and services
Makes up just over 60% GDP

Question 2

Disposable income

Answer 2

The amount of income consumers have left over after taxes and social security charges have been removed

Question 3

Consumers Marginal propensity to consume

Answer 3

How much a consumer changes their spending following a change in income

Question 4

Consumer marginal propensity to save

Answer 4

The proportion of each additional pound of household income that is used for saving

Question 5

Influences on consumer spending

Answer 5

• interest rates
• consumer confidence
• wealth effects