Consumer Sovereignty and Decisions to Spend or Save (HSC SSCE Economics): Flashcards

Consumers determine what gets produced via their purchase choices

Goods designed to wear out quickly to encourage repeat purchases

$Y$ = disposable income, $C$ = consumption, $S$ = savings

$\frac{C}{Y}$ (consumption divided by income)

$\frac{S}{Y}$ (savings divided by income)

1 (every dollar is either spent or saved)

Proportion of each extra dollar of income spent on consumption

1 (each extra dollar is either spent or saved)

APS rises (people save a higher proportion of income)

Young (dis-save), working-age (save), retired (dis-save)