With an increase in consumer spending, there will be an increase in demand for goods/services, and therefore an increase in production, which drives the economy up.
In a typical 4 sector economy (picture a circular flow), sector 1: The Household, provides the factors of production of Land, Labor and Capital to sector 2: The Firm. In return, the firm provides the...
Very adversly! Reduction in cosumer spending can bring by a recession. If people spend less, there will be less demand for goods and services. With demand, production will be decreased. When...
It depends on what they spend on. If they spend on infrastructure for instance then more people end up being paid for goods and services, this in turn leads to more spending on other things as the...