Use of English - Multiple Choice

Consumer Confidence

Consumer confidence is often described as a measure of how optimistic people feel about the economy and their own finances. When prices remain stable and employment levels are high, people are more likely to feel secure and spend money (0) FREELY. However, confidence can quickly (1) .......... if inflation rises sharply or if news reports focus on job losses and falling wages. In many countries, economists pay close attention to consumer surveys because they can (2) .......... early signs of changing behaviour. If households expect difficult times ahead, they may cut (3) .......... on unnecessary purchases and delay major decisions such as buying a car or moving house. As a result, businesses may see demand (4) .......... and become more cautious themselves. This creates a cycle in which negative expectations can have a real effect (5) .......... economic activity. On the other hand, when interest rates are low and salaries are rising, people tend to look (6) .......... to the future with greater confidence. Even so, consumer confidence does not depend (7) .......... statistics alone; it is also shaped by headlines, personal experience and public trust. For that reason, governments try to bring (8) .......... stability whenever the economy appears uncertain.