Product Purchases And The Economy Instructions Assignment

Product Purchases and the EconomyName:Institutional affiliation IntroductionThe condition of the economy as a whole plays an important role in the decisions made by consumers while purchasing a product or service. Consumers need to carefully evaluate the economic trends in order to plan, before making these purchases that require long term commitment such as new cars or a house. When the real income of consumers increase relative to the prices of goods and services, the consumers tend to buy more due to the high purchasing power. Other factors include the global economic trends which affect the prices of imported goods, the available financing options by the seller or from other financial institutions.Economic IndicatorsEconomic indicators indicate the current state of the economy, as well as enabling the consumers to judge the future economic trends. Consumers use the these indicators to predict the price patterns of goos and services. Producers also analyze these economic trends in order to determine the volume of production. These indicators include the interest rates and the inflation rate.Inflation measures the rate at which prices of goods and services are rising. When the inflation rate is high, the prices are rising faster, reducing the