Is there any effect of the income on the purchasing power?
Is there any effect of the income on the purchasing power? For normal economic goods, when real consumer income rises, consumers will demand a greater quantity of goods for purchase. The income effect and substitution effect are related economic concepts in consumer choice theory. Normal goods are those whose demand increases as people's incomes and purchasing power rise. How does income affect spending? The income effect relates to how a consumer spends money based on an increase or decrease in his income. An increase in income results in demanding more services and goods, thus spending more money. In general, when...