ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -consumption function, in economics, the relationship between consumer spending and the various factors determining it. At the household or family level, these factors may include income, wealth, expectations about the level and riskiness of future income or wealth, interest rates, age, education, and family size.

Detailed explanation-2: -The key determinants of consumption include income, savings, expectations, changes in fiscal policy, debt levels, and the availability of goods and services.

Detailed explanation-3: -The classic consumption function suggests consumer spending is wholly determined by income and the changes in income. If true, aggregate savings should increase proportionally as gross domestic product (GDP) grows over time.

Detailed explanation-4: -The economic factors that most affect the demand for consumer goods are employment, wages, prices/inflation, interest rates, and consumer confidence.