In this article we will discuss about the determinants of consumption of goods. Also learn about Engel's law of consumption. Consumption and Its Determinants: Determinants of Consumption Consumption refers to the utilisation of goods and services for the satisfaction of human wants. According to Marshall, it is the process through which human wants are satisfied, and according to Adam Smith [...]
The following article will guide you to learn how to calculate MPC and APC from the consumption function. According to A. H. Hansen, the consumption function is 'the heart of the Keynesian analysis'. The consumption function—'the propensity to consume' in Keynesian terminology—was a fundamental component of the General Theory (1936). That hypothesis states that consumption expenditures are a function of [...]
The following article will guide you about the top nine factors determining consumption spending. The factors are: 1. Income distribution 2. The rate of interest 3. Liquid assets and wealth 4. Expected future income 5. Sales effort 6. Capital gains 7. Consumer credit 8. Fiscal policy 9. Other factors. Factor # 1. Income Distribution: Keynes believed that the MPC of [...]