What is Consumption?
- Consumption is the spending by households on goods and services, with the exception of the purchase of new housing.
How Do I Remember It?
- Think of consumption as “household spending.” It’s like all the money households spend on things they use or consume, such as food, clothing, electronics, and services.
Real World Example
- For example, when a family buys groceries, goes out to eat, or pays for utilities like electricity and water, they are engaging in consumption. Similarly, when individuals buy clothing, furniture, or electronics, they are also contributing to consumption.
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By: Ryan Aquino
