Consumer Economy
Definition
A consumer economy is an economic system that depends on a large amount of spending by consumers who buy goods and services produced within that economy.
Analogy
Imagine if Instagram depended solely on how much its users interacted with posts, stories, reels etc., The more interaction (or consumption), the better Instagram does. That's how a consumer economy works - it thrives when consumers spend more.
Related terms
Supply and Demand: This is an economic model which states that the price at which a good is sold is determined by its supply and its demand. Like followers and likes on social media - too many posts (supply) might decrease likes (demand).
Inflation: This refers to the rate at which general level of prices for goods and services is rising, eroding purchasing power. It's like if suddenly all items in your favorite online store became more expensive overnight.
Gross Domestic Product (GDP): This measures the value of economic activity within a country. It's like the total number of likes, comments, and shares on all your social media posts combined.
"Consumer Economy" appears in:
Study guides (2)
Practice Questions (1)
- How did urbanization contribute to the development of a consumer economy in 18th-century Europe?
Resources
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