compensation of employees
gross operating surplus
+ taxes less subsidies on production and imports
P & M
is a common concept in economics, and gives rise to derived concepts
. Generally consumption is defined by opposition to
the precise definition can vary because different schools of economists define production
quite differently. According to some economists, only the final purchase of
constitutes consumption, and every other commercial activity is some form of
production. Other economists define consumption much more broadly, as the aggregate of all
economic activity that does not entail the design, production and marketing of goods and
services (e.g. "the selection, adoption, use, disposal and recycling of goods and services").
Likewise, consumption can be measured by a variety of different
. The total
in an economy is generally calculated using
, a metric devised by
John Maynard Keynes
, which simply takes the
and multiplies it by a "
marginal propensity to consume
metric essentially defines consumption as the part of disposable income that does not go into
. But disposable income in turn can be defined in a number of ways - e.g. to include
borrowed funds or expenditures from savings.
is the dedication of resources or assets to creating financial benefits in the
form of income or profit in the future.
It is related to
Investment is involved in many areas of the economy, such as
no matter for households, firms, or governments. An investment involves the choice
by an individual or an organization such as a pension fund, after some analysis or thought, to
place or lend money in a vehicle, instrument or asset, such as
), or the foreign asset denominated in
foreign currency, that has certain level of risk and provides the possibility of generating
returns over a period of time.
Investment comes with the risk of the loss of the
. The investment that has not
been thoroughly analyzed can be highly risky with respect to the investment owner because
the possibility of losing money is not within the owner's control. The difference between
and investment can be subtle. It depends on the investment owner's mind whether
the purpose is for lending the resource to someone else for economic purpose or not.