I see headlines and articles discussing how consumer spending is driving, or of late, possibly slowing, the economy. But if not for people buying non-essential products and services, what else would drive the economy? Everyone needs food, shelter, and clothing. Many need cars, depending on their location. But I take it that spending on necessities is not enough, especially non-consumable or long lasting things like houses and cars.
In: Economics
C + I + G + NX = The Economy
C is consumer spending
I is business spending (investment). It’s functionally the same but a different group. Businesses buying stuff for sale.
G is government. Government buys trillions of dollars of labor and things.
NX is net exports, exports minus imports.
As you correctly identify, C is the biggest. But it’s not alone.
Latest Answers