Question

How consumer expenditure effects nationality economic

Answer 1

Answer-

Effect of Consumer spending on nationality economic.

1. Consumer spending is what households buy to fulfill everyday needs. This private consumption includes both goods & services. Everyone of us is a consumer.

2. The things we buy every day create the demand that keeps companies profitable and hiring new workers.

3. Nearly 2/3 of the consumer's spending is on services, like real estate and healthcare. Other services includes financial services, such as banking, investment and insurance.

4. The remaining 1/3 of our personal expenditure is on goods. These includes so-called durable goods, such as washing machines, automobiles and furniture. More frequently we buy non-durable goods, like gasoline, groceries and clothing.

5. Consumer spending is the single most important driving force of the economy. Keynesian economic theory says that the government should stimulate spending to end a recession, but supply side economist recommend the opposite. They believe the government should cut business taxes to create jobs.

6. If you doubt this, think about what would happen if everyone stopped spending. Businesses would eventually go bankrupt and lay off workers. The government would then have no one to tax.

7. Consumer spending is measured in many different ways. The most comprehensive is the monthly personal consumption expenditure report.

8. Retail sales is another component of consumer spending. You can check how healthy it is with the most recent retail sales statistics.