Which of the following will raise consumer expenditures?
A)an increase in interest rates
B)a general decline in housing prices
C)an increase in expected future income
D)an increase in the price level
E)an increase in the unemployment rate

Question

Quizplus · Accepted Answer

An increase in expected future income will raise consumer expenditures as consumers will have more disposable income to spend. A decrease in interest rates (which is not a given option) could also raise consumer expenditures by making borrowing cheaper, but this option is not included in the given choices. A general decline in housing prices, an increase in the price level, and an increase in the unemployment rate would likely have a negative effect on consumer expenditures.

Which of the Following Will Raise Consumer Expenditures