wealth effect

Popular Terms
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.

Use 'wealth effect' in a Sentence

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