what would be the impact on the australian dollar of strong growth in domestic consumer spending?

Answer 1

Inflation. You have "too much money chasing too few goods" ie demand pull inflation. This is why when the RBA sees inflation starting it puts the brakes on by increasing interest rares. Consumer spending is important but too much causes problems.

Answer 2

domestic consumer spending is good because it shows that Y (income level) is high. when Y is high, a country's economy is welll-off.

but depends on your interest rate. since people are spending more (means they are saving less), this would mean that the interest rate of ur country is low. lower rate means the investment growth there is high. its another good thing there.

p/s pls correct me IF u find me wrong *winks*