What Does Consumption Mean?
Consumption is a concept in economics that studies how consumption is correlated to net income. Generally, consumption of goods increases with an increase in income, with consumption exceeding income leading to debt. In the calculation of a country’s Gross Domestic Product (or GDP for short), there are two main types of consumption, personal consumption and government consumption. Personal consumption refers to the usage of an individual’s personal income to consume perishables and non-perishables, as well as paying for services. Government consumption refers to the government spending on the running of the nation.
