An increase in consumer confidence is probably the most important factor in achieving economic growth. Explain one reason why this may be true and one reason why it may not The UK economy grew by 0.4% in the third quarter of 2015, figures show, less than previouslyestimated.The rate was revised down from 0.5% because the key services sector, which accounts for well over 70% ofUK economic activity, grew more slowly than had been thought.In annual terms, growth in the third quarter of the year was revised down to 2.1% from the previous estimateof 2.3%.The UK economy has been growing for 11 consecutive quarters.Adapted from www.bbc.co.uk/news/business/economyUK GDP growth, quarter on previous quarter%1.51.0L0.50.0--0.5-1.0-1.5-2.0-2.52003 20042005 200620072008200920102011201220132014 2015Source: ONSBBC

Reason for true: An increase in consumer confidence leads to higher consumption as the consumers…

Answered: An increase in consumer confidence is…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter11: Gross Domestic Product

Section: Chapter Questions

Problem 8SQP

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An increase in consumer confidence is probably the most important factor in achieving economic growth. Explain one reason why this may be true and one reason why it may not

The UK economy grew by 0.4% in the third quarter of 2015, figures show, less than previously
estimated.
The rate was revised down from 0.5% because the key services sector, which accounts for well over 70% of
UK economic activity, grew more slowly than had been thought.
In annual terms, growth in the third quarter of the year was revised down to 2.1% from the previous estimate
of 2.3%.
The UK economy has been growing for 11 consecutive quarters.
Adapted from www.bbc.co.uk/news/business/economy
UK GDP growth, quarter on previous quarter
%
1.5
1.0
L
0.5
0.0-
-0.5
-1.0
-1.5
-2.0
-2.5
2003 2004
2005 2006
2007
2008
2009
2010
2011
2012
2013
2014 2015
Source: ONS
BBC

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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