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'Expectations of the future have a significant impact on consumption and investment decisions made by individuals.' Discuss, in the light of the macroeconomic consumption and investment functions.
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Emmanouil Drakakakis Department of Management Spring Term 2003 Economics Essay #4 1. 'Expectations of the future have a significant impact on consumption and investment decisions made by individuals.' Discuss, in the light of the macroeconomic consumption and investment functions. Investment decisions made by individuals are highly affluenced by the expectations they have for the future because of the fluctuations which occur to the market. It is not possible to ensure the outcome of an investment in the future as they are highly liquid in view of divisions of time periods. An individual can manage his investments by saving or liquidating them in a given time period. It is impossible then to predict accurately for future investments but people often assume future changes in order to have a sense of stability in their lives and decisions. Consequently, it is essential and very important for an individual to have certain expectations of the future. For...
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