39.         CONSUMPTION
1.      Meaning
It is the expenditure incurred by the people to purchase goods and services to satisfy their various wants.

2.      Determinants
It is a function of income. It depends on the level of income.

3.      Features
If the consumption is equal to production level, there is no scope for investment.

4.      Purpose
Consumption expenditure satisfies the wants of the people.

It is expenditure incurred for creation of capital assets in the economy.

It depends on the marginal productivity of capital and rate of interest.

If the consumption is more than production level, there is scope for investment.

Investments generate economic development of a country.