Economic expansion has a direct impact on the level of consumer spending in an economy, which can lead to a high demand for products and services. from changes in direct taxes and state welfare payments; Level of and changes in employment & job security; Availability and cost of consumer credit – affects willingness to borrow; Costofservicing a mortgage (i.e. II and III only 4) iii and iv only " ( 5) i, iii and iv only Question 8 Increased consumer spending will usually cause: Increased consumer spending will usually cause: (Points : 1) lower consumer prices. They may not have time to build the manufacturing needed to boost supply. Decreased consumer spending will usually cause . (e.g. Anne has a goal of “sabving some money month for vacation next summer” Anne’s goal lacks . Key factors influencing consumer spending. The main cause of unemployment is reduced demand for the goods and services being provided by various workers. Changes in real disposable incomes (Yd) for households e.g. reduced employment levels. construction workers employed by government increase spending in pubs and transport, causing other sectors of the economy to benefit from the government spending). reduced employment levels . lower consumer prices . Demand-pull inflation is the most common cause of rising prices. If the above data is accurate, then all of the government spending that could be considered consumer-stimulative carried out to date amounts to only 93.1% of the lost income from COVID-19. View Test Prep - 8.jpg from FINANCE ADM 3445 at University of New Brunswick. Answer to p . If government spending causes the unemployed to gain jobs, then they will have more income to spend leading to a further increase in aggregate demand. 15 Increased consumer spending will usually cause : A . In a closed economy with only lump-sum taxation, if the MPC is equal to 0.75, a $70 billion increase in government spending could cause a maximum increase in output of A) $ 52.5 billion B) $70 billion C) $122.5 billion D) $210 billion E) $280 billion lower tax revenues. They may not have enough skilled workers to make it. Producers can't make enough to meet demand. U.S. consumers have amassed savings as the deadly coronavirus causes unprecedented economic and societal disruption. reduced employment levels . C . B . D . lower tax revenues . lower interest rates. It occurs when consumer demand for goods and services increases so much that it outstrips supply. higher employment levels. 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