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Friday, November 30, 2007

Growth in consumer spending slows

This was an interesting article concerning the lack of growth in consumer spending in the U.S. While consumer spending is growing, it has seen its smallest growth recently.

I am an economics major and became very interested after reading this article. Being the largest consumer market gernerally makes most economic models very easy to understand. Considering indifference curves, supply and demand, and budget line analysis, it is actually very interesting to attempt to apply models to real world situations such as this.

One thing the article mentioned is that overall salaries have only increased by the slightest of margins. This is probably the main reason that consumer spending has only gone up .2%. This relates specifically to budget line analysis. The budget line has only shifted up a little for consumers and therefore, they can only move up to a slightly higher indifference curve.

I know this realization probably wont be published in an economics journal anytime soon, but it was interesting to apply some of the things i have learned to the real world. THIS WAS WRITTEN BY: DAVID BIONDO

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