Consumer spending

Key Issues
The meaning of consumption
Durable and non-durable goods
The key economic factors affecting household consumption
Macro-economic effects of changes in consumption
Consumption and monetary and fiscal policy
Background Information
Consumer spending is spending on household goods and services
We make a distinction between
Spending on durable goods
Spending on non-durable goods
Consumer spending is the largest component of AD
Change in consumer demand have an important impact on short run aggregate demand/economic growth