There are numerous attributes that helps keep our economy stable and to continue to grow. Two of these attributes are consumption and investment demand.
Consumption just means the amount or value of the goods and services we buy in our economy. However, even though it seems so simple, consumption is a very important part of our economy. In fact, many people determine how their economy is performing on the consumption in their economy alone. Also, consumption is typically the biggest GDP component which is another reason it is very important.
Investment demand is very vital on our economy as well. It is important because depending on the value of certain things like machines, structures, agriculture, and other things the demand will either be high or low. If the demand is high that typically means production rates will increase too which is why this is very important to our economy.
Personally, I believe that investment demand is more helpful to stimulate economic growth. It is more important in my opinion because the need of labor while producing many goods. Also, it can improve cost effectiveness and helps update the process of production.
Personally I believe the economy should focus on stimulating consumers. I believe in this because consumer spending makes up more than half of our economy, and whenever our economy is in a decline consumer spending usually plays a big part in the recovery of the economy.Overall, the consumers are the main driving force in our economy so that’s why I believe our economy should stimulate the consumers.
Halicki, Initial Post
Stimulating economic growth requires a bunch of different factors including consumption and investment. Determining which of these two factors is more appropriate to help stimulate economic growth depends on the people who are going to be stimulated. There is definitely more money in big corporations, and the best way to help these huge entities is by increasing the investment demand. This would help them by making them more likely to invest more money into smaller businesses. It would also make people more likely to invest into businesses which would greatly stimulate economic growth.
Consumption also stimulates the economy, but in a slightly different way. It puts the power of stimulation into the hands of the people. It is an intuitive fact that increased consumption also increases demand which stimulates economic growth, but I feel that increasing consumption is more difficult than stimulating investment demand, because one way to stimulate investment demand is by decreasing the interest rate. That is easier than some of the things that stimulate consumption.
If I had to chose the factor that would better stimulate the entire economy, I would chose investment demand. Investment demand helps businesses a little more than people, but the entire American working class works for some business or entity, so helping businesses thrive will keep more people happy than consumption. The bottom line is that both factors have a very impactful effect on the economy, and our economy would crumble without one of these factors. However, investment demand is easier to stimulate and it impacts the entire economy.
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