The final end of all economic activity is to satisfy the needs and wants of the population.

The term that has come into use within economics, to describe the purchase of goods and services by the community, is consumption.

When the term is used today, that is what is meant, buying things for final personal use.

In earlier periods in economics, consumption meant using up.

A new product might have emerged, but the labor time, raw materials, capital equipment or whatever had been devoted to some particular use, had been consumed, that is, had been diverted into this particular endeavor with some of the inputs, such as the flour that went into baking of the bread, gone entirely.

The modern meaning of consumption is the purchase of goods and services by their final consumers.

But its alternative, earlier meaning, should also be kept in the back of your mind since it points in the direction of a more profound understanding of the ways in which economies work.

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