What is the term used to describe when a person has increased purchasing power and may decide to buy additional products?

The term that describes when a person experiences increased purchasing power and is likely to buy more products is the income effect. This concept reflects how changes in a consumer's income influence their purchasing decisions. When individuals have more disposable income or buying power—whether due to higher wages, a tax cut, or a decrease in the price of goods—they often feel more financially secure and may buy not only more of what they already consume but also additional items or higher-quality goods that they might not have considered purchasing before.

The income effect illustrates that as consumers feel wealthier, they tend to shift their consumption patterns, leading to increased demand for a variety of products, especially normal goods, which are those whose demand increases as income rises. This phenomenon is a fundamental aspect of consumer behavior in economics, demonstrating how individual choices can change in response to variations in economic circumstances.