Use of English

Consumer Confidence

News reports often suggest that people’s willingness to spend money is closely linked to the state of the economy. When prices rise quickly and wages fail to keep (0) PACE, many households begin to worry about the future. As a result, they may cut (1) .......... on non-essential items such as holidays or new electronics. On the other hand, when employment is strong and interest rates remain stable, consumers are more likely to feel confident (2) .......... their finances. Economists often look at surveys to measure public opinion. These surveys do not only reflect current conditions, but also show whether people expect the situation to get better or worse in the months (3) .......... . If people believe that inflation will fall and salaries will rise, they are generally more willing to (4) .......... major purchases. However, if the news is full of uncertainty, confidence can drop sharply. In the long (5) .........., consumer confidence can have a real effect on business activity. When people avoid spending, companies may delay investment and cut back (6) .......... hiring. This can create a cycle in which weak confidence leads (7) .......... slower growth. For this reason, governments and businesses both pay close (8) .......... to changes in public mood.