Wednesday, June 03, 2009

Unit 2: How much is consumption effected by changes in disposable income?

An interesting article from the BBC on the link between disposable income and consumption

http://news.bbc.co.uk/1/hi/business/8077598.stm

a) What is the expected link between disposable income and consumption?
b) Why does it not appear to be the case in the US at the moment?

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