What are the factors affecting consumption?

Answer 1

Consumption is the scale to measure the total ammount of goods bought for any one economy. There are various factors that affect it:

- Prices. If prices are high then consumption will be low because consuming will use up a higher percentage of a person's income.

- Inflation. If inflation is low but is rising, then people will want to buy more earlier, so that they get it for a cheaper price as opposed to having to pay for it when inflation is higher. The same applies but reversed when inflation is high but falling.

- Taxes. If taxes are very high on goods then people may object to this and not buy goods out of protest or they may not be able to afford goods.