The Effect of the Income Gap on the Consumption Demand under the Dual Economic Structure

Our country has an obvious dual economic structure,which leads to a big income gap between urban and rural residents,which in turn will inevitably cause the great difference in consumption and consequently affects the consumption demand,resulting in reduction of the marginal propensity to consume,unbalanced supply and demand,consumption fault and the change of the consumption expectation,sequentially forming a strong obstacle to expanding of the consumption demand.To expand consumption demand the income gap between urban and rural residents must be narrowed.