“It is assume that consumers are the most important players in the business environment. Make the case for or against this claim using examples and theory to support your answer”
Economic studies is of great significance in a number of aspects. The primary component of consideration in this way is the consumer of the economic resources. They deserve as a considerable component because they buy houses, vehicles, investments and spend their life in the country within which their routine life is influenced by economic decisions. There is a need to research, the underlying economics of interest rates, mechanics of demand/supply strategies, market fluctuations and other economic factors during the course of their life time. Keeping in view the economic factors, consumer spending and savings, the consumers are the most important contributors of business environment. A number of theories and illustrations have been presented by multiple scholars, economists and journalists (eNotes, 2015).
Talking on a broad economic view, a local economy is a combination of individual, corporations and governmental spending/investment. Consumers serve as a significant contributing factor to economies. In accordance with Henry Hazlitt i.e. author of “Economics in One Lesson,” the consumer accounts for almost 70% of the national economy. In this regard, the consumer spending is of remarkable consideration. In an economy, where there exists free market economy, there is major reliance on demand of consumers to evaluate the assigning and division of resources. Consumer spending is one of the key factors in economics as it correlates with the entire consumer confidence in an economy. Higher the consumer confidence, higher will be the spending by the consumers in the overall consumer market. Consumer confidence in general serves corporations and Governmental departments as an analyzing element while considering the consumer behavior. Regarding the economy of United States, the consumer confidence is computed by way of a complete survey of 5,000 individual households. Other economies in this way, conduct other analyses to ascertain the consumer behavior and take appropriate steps to boost the economy. (Small Business – Chron.com, 2015)
There exists a need to understand the literature review on growth of consumption. Consumer behavior stands for portion of economic population (Lury, 2011). All of the individuals are consumers. The way the activities are performed while the consumer obtain, consume and dispose of products and services (Blythe, 2008)). In this regard, there exist cultural diversity in an economy as the behavior of individuals is different in terms of exports, consumption and savings(Bode, 2008). With respect to consumption, investment and savings, Mullen and Johnson provide handy demonstration of recent theory of psychological, as it lights primary matters pertaining to the psychology of consumers(Mullen and Johnson, 1990). In order to get aware of the connection of consumer spending and the economic growth, there should be proper understanding of the process of growth in economy. The general definition of the word growth is the increment of economic potential in order of production of goods and services. As the investment grows, the productivity margin of the economy enhances. Investing activity demands a decline in consumer spending in order to avail adequate amount of money for investments.