Answer to Question #317491 in Microeconomics for annu

Question

 Explain the various factors that buoyed Canadian consumer confidence in 2012

Answer 1

The various factors that buoyed Canadian consumer confidence in 2012 are some expectations about price level, inflation and overall situation in economy.

A jump in the stock market as a result of rising prices has led to a surge in consumer confidence as due to increasing wealth.

The key determinant of household consumption expenditure is wealth and with higherwealth consumers feel confident enough to spend more and save less Also,with the end of recession the consumers have much more positive perspective about the economy than they had earlier. This leads to people being more open to spend on big items such as housing and cars