Question

Explain, with the use of an example, the impact that inflation has on consumer spending. Note:...

Explain, with the use of an example, the impact that inflation has on consumer
spending. Note: marks will be awarded for proper referencing and paraphrasing
of this question

Homework Answers

Answer #1

Answer-The impact that inflation has on consumer spending is when inflation increases then the cost of goods and services also increases which means the cost of living for an individual also increases. In the case of inflation if the rate of increase in inflation is the same as an increase in the income of the consumers then there will be no negative effect but if there is an increase in the inflation rate and there is no increase in consumers income then it will have a negative impact on the consumers' income, there will be the condition where consumer need to pay more money to consume those goods and services whose earlier price was less than the present price.

For Example-If there is a sudden decrease in the supply of  coconut oil, then it will lead to an increase in the price of coconut oil,by this it will result into the inflation.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Concider how short-run fluctuations affect many things: unemployment, inflation, consumer confidence, spending by firms, government spending...
Concider how short-run fluctuations affect many things: unemployment, inflation, consumer confidence, spending by firms, government spending ect. Use the AS-AD model to illustrate examples of how recession or expansion has a broad influence on society.
10. China’s economy has seen dramatic increases in investment, consumer spending, government expenditure on infrastructure, and...
10. China’s economy has seen dramatic increases in investment, consumer spending, government expenditure on infrastructure, and exports to the United States and to Europe. Inflation in China, however, has remained fairly moderate. Explain why this may be the case using the aggregate demand curve and the inflation adjustment line.
Use the IS-LM model to explain how the stock market impact of a surge in consumer...
Use the IS-LM model to explain how the stock market impact of a surge in consumer confidence depends on the response of the central bank.
Short Answers, Graphing. 2. Diagram and explain the impact of increased government spending on a new...
Short Answers, Graphing. 2. Diagram and explain the impact of increased government spending on a new missile-defense program on the U.S. economy. The question should be thought from the short-run perspective. That means you don't need to explain how the economy transits to the long-run equilibrium. If it helps, make the following change to the question: "Diagram and explain the short-run impact of increased government spending on a new missile-defense program on the U.S. economy."
The economy has considerable excess capacity. Would an increase in government spending likely cause inflation? Explain.
The economy has considerable excess capacity. Would an increase in government spending likely cause inflation? Explain.
Explain and graphically illustrate the impact of COVID-19 on investment spending and aggregate demand using at...
Explain and graphically illustrate the impact of COVID-19 on investment spending and aggregate demand using at least one (1) of the determinants of investment spending. A high-quality response must include the steps leading up to the change in the determinant. For example, if I were to make the claim that business taxes increased, I would have to first explain how I moved from COVID-19 to a rise in business taxes, and then trace out the effects on investment spending and...
Can you explain how does the willingness to give up some spending impact the trade-off for...
Can you explain how does the willingness to give up some spending impact the trade-off for allocation of your budget to other items? This question comes from the Principles of Microeconomics book or ECO 202 class.
5. A consumer holds money to meet spending needs. This would be an example of the:  ...
5. A consumer holds money to meet spending needs. This would be an example of the:   A. Use of money as a measure of value B. Use of money as legal tender C. Liquidity demand, also known as transactions demand for money D. Asset demand for money 6. The fundamental objective of monetary policy is to assist the economy in achieving: A. A rapid pace of economic growth B. A money supply which is based on the gold standard C....
Use "LINEAR PROGRAMING TECHNIQUE " to explain limiting factor with several constraints ( 15 marks) NOTE...
Use "LINEAR PROGRAMING TECHNIQUE " to explain limiting factor with several constraints ( 15 marks) NOTE : LINEAR PROGRAMING SHOULD BE SHOWN IN DETAILS
Coronavirus impact: India inflation likely to have hit six-month low in May: Poll . India consumer...
Coronavirus impact: India inflation likely to have hit six-month low in May: Poll . India consumer price inflation is likely to have moderated to a six-month low in May on a softer rise in food prices as supply disruptions eased after businesses reopened from the coronavirus lockdown in many parts of the country, a Reuters poll found. The June 4-9 poll of 35 economists showed that the consumer price index (CPI) was forecast to rise to 5.50% in May compared...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT