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1. List 5 determinants of consumption. 2. For each of the following, identify and state the...

1. List 5 determinants of consumption.

2. For each of the following, identify and state the determinant of consumption that's most relevant. Explain the change in consumption that results from a change in this determinant. Illustrate the change using a consumption function curve and an AD (two diagrams side by side). a. Consumer households are very optimistic as the job market is very robust. b. Consumer households' wealth increases as the value of residential housing has been appreciated in the last few years.

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Question number 1 is answered:

5 determinants of consumption are as follows :

Income distnibuhon- Kehs believedl thou athe MPC ouw income gwold be hig her than shc of dange income poops. Thus more income foe m3Gch to boo» will noe as e the censump ion oL interes es the people o theim mono 、n banks un vice versa hatpers when oTis low 3 Ex pected Puwhe incomeP the house helels en est higher eo어 nirge in the tutun , tren o ther things se manirg the some, the hresen consomp lon inceases and vice vevoc 4. Consumer Credit-A eec d and Jange . Comomer, he ox she tendls to p ndl mae ancl inoreQoe cersomption. On the othe>, consumption Hcome and hente Conuomphin s less. o ce versa s afpli cable

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