Question

Answer the following questions.
What are the efforts of population on consumption expenditure?

Answer 1

(1) Consumption expenditure refers to the total amount spent by the consumers on the purchase of goods and services to satisfy their wants.
(2) It is one of the determinants of aggregate demand.
(3) Consuming expenditure is determined by many factors like disposable income, fashion, future expectations, credit facility, stocks of wealth and size and composition of population.
(4) There is direct relationship between the size of population and the consumption expenditure.
(5) If the country has large population then consumption expenditure will be high and vice-versa. This will raise the demand, therefore production and employment will increase.
(6) With increase in employment, income also increases. It increases the purchasing power of people.
(7) With increase in population the government consumption expenditure on education, health, defence, police, etc. increases.