Wealth effect

Wealth effect,

Definition of Wealth effect:

  1. Changes in aggregate demand caused by change in the value of assets such as stocks, bonds, gold, property. Increase in the market value of these assets induces a feeling of being richer in their owners (even if no additional cash is realized) and often tends to encourage spending and to dampen savings.

  2. The tendency of a person to spend increasing amounts of money as a result of his or her increase in personal wealth or perception that the economy at large is thriving.

How to use Wealth effect in a sentence?

  1. The wealth effect was something that everyone liked because the feeling of being rich is something very addictive and fun.
  2. You should try to figure out how the wealth effect may impact your product and come up with strategies to adjust.
  3. Sometimes there will be a change and you will need to figure out how the wealth effect will impact the marketplace.

Meaning of Wealth effect & Wealth effect Definition