Thursday, February 17, 2011

Consumption and savings

In the economics lesson there is Consumption and savings, in economy consumption expenditure consists of household consumption expenditure and government consumption expenditure. In the article as household consumption expenditure.
Household consumption expenditure is the biggest part of total consumption expenditure. In addition, household consumption expenditure relating to the factors influencing it such as the amount of disposable income. Factors affecting the level of consumption: - The amount of family income the greater the household income the greater the level of consumption, because as income increases, the ability of households to buy various goods demanded increases. This can prove, for example, when incomes were low, only a few goods and services consumed because they are unable to meet their needs. - Property owned by households household wealth can be a real wealth such as land, housing and financial wealth can be shaped like a deposit, savings, stocks, etc.. - Durable goods owned number of goods owned by people older Than affect their consumption levels, if the number of durable goods owned by many, consumption spending will decrease, and when a durable material which is owned slightly so people tend to like to consume new goods - Interest rate Interest rates affect the level of consumption. For those who do not have much money, is usually to take loans from banks. if interest is high, then people will tend not to borrow money. If the interest rate high enough savings or time deposits, households tend to save money, thus reducing consumer spending.



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