Consumer economy
Encyclopedia
A consumer economy describes an economy
driven by consumer spending
as a percent of its gross domestic product
, as opposed to the other major components of GDP (gross private domestic investment
, government spending
, and imports netted against exports).
The often-quoted statistic for the United States, for instance, is that consumer spending amounts to 70% of GDP since 2001 .
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
driven by consumer spending
Consumer spending
Consumer spending or consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level...
as a percent of its gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
, as opposed to the other major components of GDP (gross private domestic investment
Gross private domestic investment
Gross private domestic investment is the measure of investment used to compute GDP. This is an important component of GDP because it provides an indicator of the future productive capacity of the economy. It includes replacement purchases plus net additions to capital assets plus investments in...
, government spending
Government spending
Government spending includes all government consumption, investment but excludes transfer payments made by a state. Government acquisition of goods and services for current use to directly satisfy individual or collective needs of the members of the community is classed as government final...
, and imports netted against exports).
The often-quoted statistic for the United States, for instance, is that consumer spending amounts to 70% of GDP since 2001 .