Consumption Spending
Spending on consumer goods and services.
Durable Goods = Long lasting - eg, cars, appliances
Semidurable = relatively shorter lasting - eg, clothes
Nondurable = quickly consumed or used up - eg, food
Sayer, John E, and Alan J Morris, Principles of MNacroeconomics 6th edition, McGraw-Hill Ryerson, 2009, pg 99


Determinants of Consumption Spending

- Change in income (CHANGE INDUCED SPENDING- Spending dependent on level of income)

- Change in wealth (wealth effect)

- Change in prices (real balances effect)

- Change in the age of durable goods owned by consumers

- Change in consumer expectations

***Bolded items are a change in AUTONOMOUS spending is spending independent of the level of income* [1]

Determinants of Consumption Spending
- Change in income (CHANGE INDUCED SPENDING)
- external image clip_image001.gifChange in wealth (wealth effect)
- Change in prices (real balances effect) CHANGE IN AUTONOMOUS
- Change in the age of durable goods owned by consumers SPENDING (SHIFT)
- Change in consumer expectations
  1. ^ **
    Aggregate Demand Lesson Notes ECON 101, Lecture, Red Deer College, Red Deer, AB, February 2012