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How do economists measure consumption?

Economics

How do economists measure consumption?

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Economists measure consumption by calculating the relationship between the amount consumers spend and consumer income and accumulated wealth. In other words, they study how much money people are spending in relation to how much money they have. Many economists argue this is too simple a measure, arguing that other factors like production, changing supply and demand, and consumer behavioral trends should also be considered. As a result, different schools of economics utilize slightly different definitions and calculations to measure consumption.