<p>No, at least not if you mean "final consumption", that is spent on goods and services solely for our own enjoyment.</p>

<p>We produce goods and services with capital and labour (and natural resources and technology and human capital, but for simplicity let's put those under capital as well). The thing is that capital detoriates over time. My computer at my work place will have to be replaced at some point. The plough of the farmer will break down eventually. The natural gas that I use to heat my house will run out eventually, although potentially not during my life time.</p>

<p>To make up for these losses we need to invest some money in replacing the lost capital and finding replacements for non-natural resources. That is we need to invest money. If we'd only spend all our money on final consumption goods eventually we'd run out of capital and wouldn't be able to produce all those goods. </p>

CC BY-SA 3.0
2018-04-18T07:04:27.510Z
2018-04-18T07:04:27.510Z
Maarten Punt
<p>Imagine all incomes being spent on consumption would such a system be in a position of no change.</p>

<consumption>
if all income is spent on consumption how will it change or affect the economy
GHOST MASTER
# if all income is spent on consumption how will it change or affect the economy

(Asked by: username_0 on 2018-04-18)

Imagine all incomes being spent on consumption would such a system be in a position of no change.

**Tags:** consumption

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## 1 answers

### Answer by username_1 on 2018-04-18. Score: 0

No, at least not if you mean "final consumption", that is spent on goods and services solely for our own enjoyment.

We produce goods and services with capital and labour (and natural resources and technology and human capital, but for simplicity let's put those under capital as well). The thing is that capital detoriates over time. My computer at my work place will have to be replaced at some point. The plough of the farmer will break down eventually. The natural gas that I use to heat my house will run out eventually, although potentially not during my life time.

To make up for these losses we need to invest some money in replacing the lost capital and finding replacements for non-natural resources. That is we need to invest money. If we'd only spend all our money on final consumption goods eventually we'd run out of capital and wouldn't be able to produce all those goods.


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