expected Obsolescence meaning Related: Chapter 1 & 2 (Macro Economic...
Expected obsolescence is the loss in value of an asset through obsolescence that the purchaser was expecting to occur when the asset was acquired. It is a synonym for “foreseen” obsolescence and is included in consumption of fixed capital.
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expected Obsolescence meaning Related: Chapter 1 & 2 (Macro Economic...
Expected Obsolescence
Expected Obsolescence refers to the planned or anticipated reduction in the useful life of a product or service by the manufacturer or provider. This strategy is often employed to encourage consumers to upgrade or replace their existing products with newer versions.
Related to Chapter 1 & 2 (Macro Economics)
Expected Obsolescence has a significant impact on macroeconomics, especially in the areas of consumption, investment, and economic growth.
Impact on Consumption
- Expected Obsolescence can lead to increased consumer spending as individuals feel the need to continuously upgrade their products to keep up with the latest trends.
- This can result in higher levels of consumption and demand for goods and services, contributing to economic growth.
Impact on Investment
- Manufacturers and businesses may invest more in research and development to introduce new products with planned obsolescence built-in.
- This can stimulate innovation and investment in the economy, leading to increased productivity and competitiveness.
Impact on Economic Growth
- Expected Obsolescence can drive economic growth by creating a cycle of continuous consumption and investment.
- However, it can also lead to concerns about sustainability and environmental impact due to the disposal of outdated products.
In conclusion, Expected Obsolescence plays a crucial role in shaping consumer behavior, investment decisions, and overall economic growth in the macroeconomic context.
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