ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Advantages. Advocates of consumerism point to how consumer spending can drive an economy and lead to increased production of goods and services. As a result of higher consumer spending, a rise in GDP can occur.

Detailed explanation-2: -An increase in consumption can increase corporate sales and corporate earnings, thus increasing the value of individual stocks. This increase in individual share price valuations could then lead to a market-wide increase in value. This has the potential to create an economic boom.

Detailed explanation-3: -The economic factors that most affect the demand for consumer goods are employment, wages, prices/inflation, interest rates, and consumer confidence.

Detailed explanation-4: -An increased total market demand may induce firms to increase prices, the more so when they operate at full production capacity or they operate on monopolized markets. Thus increased price level and accelerated inflation can be an effect of booming consumption.