Escolar Documentos
Profissional Documentos
Cultura Documentos
spending and
savings
Consumption
Consumption is defined as the ‘using up’
of goods and services in order to satisfy
our wants.
tutor2u™ AS Economics
Durables and Non-Durables Spending
Durables
Provide a flow of
services to the
consumer over a
number of years
Replaced infrequently
DVD recorders
Freezers
Cars
Furniture
Televisions
Personal computers
tutor2u™ AS Economics
Durables and Non-Durables Spending
Durables Non-Durables
Provide a flow of Used up at the point of
services to the consumption
consumer over a Require immediate
number of years replacement
Replaced infrequently Food and drink
DVD recorders Newspapers
Freezers Visits to the cinema
Cars Household fuel
Furniture Petrol for the car
Televisions
Personal computers
tutor2u™ AS Economics
Types of personal income
Income sources
Wages, salaries, rent, dividends, interest rate,
pension funds etc.
1. Gross personal income (GPI)
2. Disposal personal income (DPI)
1. DPI = GPI – income tax
3. Real disposable income
tutor2u™ AS Economics
Income and consumers’ spending
Increase in income tends to increase in
consumption, and better quality products
Along with increase in spending saving
also increases
tutor2u™ AS Economics
Influences on consumer spending
Wealth
Borrowing
Changes in the rate of income tax
Changes in distribution of income
Expectations of future incomes and
taxation
tutor2u™ AS Economics
Changes in household expenditure
Due to increase in real income, changes
in taste, fashions, introduction of new
products.
• Food
• Transport and vehicles
• Housing
• Durable household goods
• Services
tutor2u™ AS Economics
Savings
Part of disposable income which is not
spent is saved.
tutor2u™ AS Economics
Why people save
Income
Social attitude towards saving
The desire to provide for future needs
Saving for particular objective
Saving schemes
Rate of interest
Economics conditions
tutor2u™ AS Economics
End of chapter
tutor2u™ AS Economics