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3 years ago

The wealth effect refers to the fact that

Business

1 answer:

Sloan [31]3 years ago

3 0

Answer:

a. when the price level falls, the real value of household wealth rises, and so will consumption.

Explanation:

A wealth gap is the difference between the richest and poorest citizens living in a geographical location based on the level of their assets and net worth i.e assets minus their debts. Also, these informations about the citizens when generated by the government are typically used for formulating economic policies, plan and financial budgets.

Wealth effect is a behavioral economics theory (psychological phenomenon) which states that an increase or decrease in the value of an asset such as bonds, stocks, property, etc., would result in an increase or decrease in consumer spending respectively.

This ultimately implies that, the wealth effect refers to the fact that when the price level falls, the real value of household wealth rises, and so will consumption. Thus, it is mainly focused on examining how a change (increase or decrease) in personal wealth of a household influences (affects) economic growth and by extension consumer spending over a specific period of time.

In conclusion, when there is an overall increase in the performance of an asset, consumer spending would rise and increase ultimately.

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Letter C is correct. <u>Behavioral needs and attitudes of consumers. </u>

Explanation:

Strategic decisions regarding product characteristics will be more affected by the behavioral needs and attitudes of the target market.

A product or service exists to satisfy the needs and desires of the consumer and for which he is willing to pay for the added benefits. Therefore, when implementing a product-oriented strategy, it is necessary for the organization to conduct research on consumer trends and the market in which it is inserted, so that the characteristics of the product are developed focusing on the functional and emotional benefits that the consumer want.

When a company plans to develop a product for a specific market, it is necessary for the company to understand five levels:

1. Central benefit: Corresponds to the main utility of the product, related to the consumer's primary need.

2. Additional benefits : These are the other functions of the product, in addition to the central function.

3. Expected product: These are the basic conditions expected of the product, such as quality and proper functioning.

4. Extended product: Applied to the brand positioning, it corresponds to the level whose product exceeds the customer's expectations.

5. Consumer system: It is the way the user will use the product, obtain, use, adapt and dispose of the product.

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4 years ago

Mariana wants to analyze the potential viability of a new business idea. She does this by researching the sales levels of existi

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3 years ago

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Good morning/afternoon?

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lol good morning it's going well I eat and staying healthy thanks for asking you do the same

have a good day :)

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3 years ago

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Impact evaluation measures the difference between what happened having implemented the program and what would have happened without it. Responds to the question, “How much of the observed change in the target population (if any) occurred due to the program or intervention ? ”

Rigorous research designs are required for this level of evaluation. It is the most complex and intensive type of evaluation; incorporates methods such as random selection, control and comparison groups. These methods serve to:

Establish causal links, or relationships, between the activities that are carried out and the desired results.
Identify and isolate any external factors that may influence the desired result.

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