describe the factors affecting consumption in industrial society
Answers
Answer:
employment. wages. interest rates . consumer confidence etc
Answer:
Explanation: There are certain factors that affect consumption in the society. They are as follows:
1. Consumer Confidence
When consumers are upbeat on economy and find it to be growing and stable he /she tends to spend more.Other factors which lead to such spending pattern is the security of both job and future income. On the contrary if there is a sense of insecurity on the job and future income front one is likely to postpone such spending.
2. Interest Rates
A low interest regime helps in increasing consumption as consumer go for larger purchases on credit as it is cheaper to borrow. Another way to look into low rate regime is since the rates are low it makes less sense to save. Therefore low interest rates tends to increase aggregate demand.
3. Debt
Consumer under debt often restrain from spending on consumption as they need to pay off the debt before initiating further spending. Therefore consumer with low debt tend to spend more on consumption.
4. Wealth
Assets like property or stock has an impact on the consumption pattern as any increase in both the above asset leads to an increase in consumption.
5. Industrial Growth:
When a country is industrially developed it helps people in earning more and thus improve their standard of living as well as their social status in the society. On the contrary countries which lack industrial development faces huge loss of job leading to widespread unemployment. This leaves them with less disposable income.
6. Political Stability:
Political stability with neighbouring countries leads to higher consumption as the government is not forced to spend more on arms and ammunitions.
Hope this helps.