ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Consumer confidence typically increases when the economy expands, and decreases when the economy contracts. In the United States, there is evidence that the measure is a lagging indicator of stock market performance.

Detailed explanation-2: -When confidence is trending down, consumers are saving more than they are spending, indicating the economy is in trouble or in the process of contracting further. Essentially, the more confident people feel about the stability of their incomes, the more likely they are to maintain, or increase, their spending patterns.

Detailed explanation-3: -The improvement of consumer confidence leads to an increase in the consumption function. This is because the improvement in consumer confidence leads to increased consumer spending; hence, increasing the consumer functions.

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