Unemployment Extensions

An unexpected increase in Consumers Expenditure on GNP has a huge impact on GNP in an open economy country. This is because the increase of consumer expenditure will boost the consumption, and therefore this will enhance the overall productivity of the country. as the output increased, this will result in a reduction of unemployment rate in the country. This will also enhance the disposable income for households, as they have extra money to spend, then this will cause further enhancement of consumption.

Also think about leakages and injection within the economy if people begin spending more on export as GNP rises to make use of cheaper raw materials or goods. injections too- if consumer expenditure increases, firms revenues increase thus giving them the opportunity to finance current and future investments.

Bebe Miller