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Influences on Spending


Analyse the influences on spending.


Macroeconomic Factors and Policies

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I. 🍃Introduction
- Brief explanation of coherent analysis

II. Income
- Higher income increases ability to spend
- Increases purchasing power

III. Rate of Interest
- Change in rate of interest influences proportion of income spent and saved
- Affects borrowing

IV. Confidence
- People spend more when optimistic about future income and job security

V. Wealth
- People can spend some of their wealth
- E.g. sell shares, use it as collateral to borrow

VI. Inflation
- Spending may fall if prices rise more than money wages
- Spending may rise as people seek to buy products before they increase in price even further

VII. Expansionary Fiscal/Monetary Policy
- May increase spending

VIII. 👉Conclusion
- Recap of key points
- Importance of understanding factors that influence spending

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