It is measured by the annual rate of change in real GDP ie. The % increase in the value of goods and services over a period of one year, adjusted for the rate of inflation. ... Influences on consumption Consumer expectations If consumers expect a higher rate of inflation, higher real incomes or future shortages of goods then they would tend to spend more and save less in the short term and vice versa. The level of Interest Rates An increase in the general level of interest rates would discourage individuals from spending their money and therefore encourage them to save, while a decr...

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