ECONOMICS
INFLATION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
high OS demand for X, major I spending and high levels of consumer and business confidence leading to speculation
|
|
|
the government increasing the cost of production and borrowing to stop consumers and business creating an inflationary spiral
|
|
|
the AS and LAS curve shifting left and this causes aggregate demand to decrease
|
|
|
external forces that are beyond the control of a government like the GFc or wars
|
Detailed explanation-1: -An indicator above 100 signals a boost in the consumers’ confidence towards the future economic situation, as a consequence of which they are less prone to save, and more inclined to spend money on major purchases in the next 12 months.
Detailed explanation-2: -Most economists view the Consumer Confidence Indicator as a lagging indicator, which means that it follows or confirms economic trends.
Detailed explanation-3: -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-4: -The CCI assumes when consumers are optimistic, they will spend more and stimulate the economy, but if they are pessimistic then their spending patterns could lead to a recession. The CCI is based on the Consumer Confidence Survey.