Use of English - Multiple Choice

Consumer Confidence

News reports often suggest that the economy affects how willing people are to spend money, but the relationship is not always simple. When prices rise quickly and wages fail to keep (0) PACE, many households begin to worry about their future. As a result, they may cut (1) .......... on unnecessary purchases and delay major decisions such as buying a car or moving house. At the same time, confidence is not based only on personal experience. People also react to headlines, expert predictions and changes in employment figures. If unemployment is expected to (2) .........., consumers may become cautious even before they are directly affected. In contrast, when interest rates remain low and job opportunities appear to be (3) .........., people are often more prepared to take financial risks. However, consumer confidence can be difficult to measure because it is influenced by both facts and feelings. A strong economy may (4) .......... to higher spending, but sudden global events can still cause uncertainty. In the same (5) .........., negative news can damage confidence even when economic conditions are improving. For this reason, governments and businesses pay close (6) .......... to surveys that show how the public is feeling. These reports do not always predict behaviour perfectly, but they can provide a useful (7) .......... into future spending patterns and help economists (8) .......... out possible changes in demand.