Question

If consumers increase their purchase of goods and services then a likely outcome for our economy is

Answer 1

The correct answer is inflation. The more consumers spend on products and services, the higher the prices for these products and services will rise, leading to inflation. This will especially occur if the customer demand becomes greater than the supply, because then the goods and services will be even more difficult to attain, thus making them more valuable.

Answer 2

Explanation:

There could be two possible outcomes if consumers increase their purchase of goods and in the economy. One is the economic growth due to the increased economic activities. Second one is the inflation. When the flow of the currency in a country increases in the economy, inflation occurs. Inflation is the increase in the prices of goods and services. Extra flow of cash in the economy also causes inflation. Due to inflation, the prices of goods and services increase.