Answer to Question #246604 in Macroeconomics for ashley101

Question

explain two determinants of household consumption (9).

Answer 1

Household consumption can be determined by;

1) Real disposable income

it the amount of money available after one has spent on all other expenses.

If real disposable income is high households are likey to spend more and vice versa

2) The overall price level

It is the cost of goods and services that are produced in an economy.

If the cost is higher consumption by households will reduced and vice versa