The Consumption Function (Research Paper Sample)

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The Consumption function
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According to UN data, most countries have considered consumption expenditure as the most tangible element of the gross domestic product (GDP). In contrary, the vital components that explain the consumption expenditure are majorly wealth, disposable income, expected in future income the price level and the underlying interest rates.
Countryconsumption expenditurereal GDP (proxy for disposable income)
in (US. million dollars)GDP deflator (proxy for price level) in (US. million dollars)lending interest rate
in (US. million dollars)Afghanistan8,063,703,59115010.9NaAlbania8,414,732,1771243.513.1Algeria46,657,966,5167716.18.0Angola16,610,257,6666826.867.7Antigua and Barbuda845,962,8151144.311.4Argentina133,117,224,547948.86.2Armenia4,114,120,6931143.218.0Aruba1,767,184,3581094.211.5Australia521,456,923,7711033.79.1Austria223,568,537,034962.0NaAzerbaijan6,414,194,5319016.117.0Bahamas5,976,162,0001035.15.5Bahrain8,589,827,7758113.77.8Bangladesh49,389,772,3581065.114.0Barbados3,498,300,0001086.69.2Belarus21,397,284,8249918.911.4Belgium279,746,803,960962.46.7Belize997,400,0001082.314.3Benin3,870,536,0141074.4NaBhutan612,218,8641255.914.0Bolivia7,858,227,8709716.6Bosnia and Herzegovina12,908,699,2701409.6Table 1: UN data on global consumption expenditure
Countryconsumption expenditurelending interest rate
in (US. million dollars)Afghanistan8,063,703,591NaAlbania8,414,732,17713.1Algeria46,657,966,5168.0Angola16,610,257,66667.7Antigua and Barbuda845,962,81511.4Argentina133,117,224,5476.2Armenia4,114,120,69318.0Aruba1,767,184,35811.5Australia521,456,923,7719.1Austria223,568,537,034NaAzerbaijan6,414,194,53117.0Bahamas5,976,162,0005.5Bahrain8,589,827,7757.8Bangladesh49,389,772,35814.0Barbados3,498,300,0009.2Belarus21,397,284,82411.4Belgium279,746,803,9606.7Belize997,400,00014.3Benin3,870,536,014NaBhutan612,218,86414.0Bolivia7,858,227,87016.6Bosnia and Herzegovina12,908,699,2709.6
Table 2: UN data on global consumption expenditureAccording to Table 1, the effects of the increment and decrement of the interest rate on consumer spending is notable in cases of Angola and Algeria. Angola has 67.7 % interest rate against Angola which has 8% interest rate thus Angola has an expenditure of 16,610,257,666 dollars, and Algeria has a high of 46,657,966,516 dollars. High-interest rates inhibit expenditure as exhibited by the table above. The data on proxy for disposable income indicates that increase on concurrently increases the amount of consumer expenditure as exhibited in Bhutan which has a high of 125 US million real GDP...