ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -consumption, in economics, the use of goods and services by households. Consumption is distinct from consumption expenditure, which is the purchase of goods and services for use by households.

Detailed explanation-2: -Keynesian theory states that if consuming goods and services does not increase the demand for such goods and services, it leads to a fall in production. A decrease in production means businesses will lay off workers, resulting in unemployment. Consumption thus helps determine the income and output in an economy.

Detailed explanation-3: -According to economic theory, consumption of goods and services is assumed to provide utility (satisfaction) to the consumer or end-user, although businesses also consume goods and services in the course of producing other goods and services (see: Distribution: Channels and intermediaries).

Detailed explanation-4: -The consumption function is an economic concept that explains the relationship between income and spending. It was introduced by British economist John Maynard Keynes, who suggested that economists could use the consumption function to track and estimate total consumer spending in the economy.

Detailed explanation-5: -Common examples of these are food, beverages, clothing, shoes, and gasoline. Consumer services are intangible products or actions that are typically produced and consumed simultaneously. Common examples of consumer services are haircuts, auto repairs, and landscaping.