Consumption Essay

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    Article 7 Title of the Article: What are consumers buying? Cars, food, and stuff for their home Authors First and Last name: Paul R. La Monica Webaddress:http://money.cnn.com/2015/06/11/investing/retail-sales-consumer-spending Keywords/ Search terms: Consumer demand, consumer preferences, sales, consumer spending, consumer purchases, consumer salary, retail, news Summary: According to government officials, retail sales have significantly risen over the past month, which is a positive sign for the

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    1. Explain and give examples of the Consumption Function, Autonomous Consumption, and Marginal Propensity to Consume. • Consumption Function – The relationship between consumption spending and the level of income o C = Ca + by o Example: Income, wealth, interest rates, age, education, and family size are all part of spending, depending on your level of income. o The life-cycle theory assumes that household members choose their current expenditures optimally, taking account of their spending needs

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