All Together Now: C + I + G

Consumption by consumers, investment by businesses, and government spending are the three major parts of our economy and of most economies. (Foreign trade, conducted by exporters and importers, is the remaining sector, which I’ll discuss soon.)
The size of a nation’s economy is the total value of the goods and services produced in the nation in a year. This production can be measured either by the total spending that occurs in the economy or by the total cost of the goods sold, which would equal total income. You arrive at the same number whether you add up the spending on the goods and services produced or the cost of producing them (the wages, profits, interest, and rent paid to workers, companies, lenders, and ...

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