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

Question

Quizplus · Accepted Answer

An increase in expected future income will raise consumer confidence and encourage them to spend more, leading to an increase in consumer expenditures.

Option A is incorrect because an increase in interest rates will lead to higher borrowing costs and reduce spending.

Option B is incorrect because a decline in housing prices will lead to a decrease in consumer wealth and discretionary spending.

Option D is incorrect because an increase in the price level will lead to a decrease in real income, reducing consumer spending power.

Which of the Following Will Raise Consumer Expenditures