consumer spending
Spending by the consumer sector is the driving force in the US economic system. Although the business and government sectors make a considerable contribution to the success of the economy, it is the spending by the consumer or household sector of the economy that determines prosperity or recession in the economy.
- Do you agree or disagree with this argument?
- Why or why not?
- How has the spending behavior of the government sector changed over the past decade, and what effect had these changes had on the economy?
- Justify your answers
Include sources. APA format
Answer preview
I agree with the proposition that consumer spending is the driving factor of the United States economy. Consumer spending refers to the purchases made by consumers, to fulfill their daily needs and wants. Customers need goods and services for their survival, and therefore they buy them every day. This, in turn, creates more demand for the commodities leading firms to increase their supplies and improving profitability. Consequently, this leads to the growth and development of the economy. Without consumer spending, many businesses would fail and therefore cause the economy to collapse. During periods of recession, governments may devise measures to spark or catalyze consumer spending to enhance economic growth. (Howarth, & Kennedy, 2016). Examples of…
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