Structure

ECONOMIC STRUCTURE

Three basic elements make up an economic structure:

PRODUCTION

Economic production (a flow) consists of activities that create goods and services.

SAVINGS

Savings consists of the stock of goods accumulated as a result of production. The owners of savings can use them either for personal consumption or for exchange — which I will describe on another page.

CONSUMPTION

The end of an economic structure consists of a flow of goods and services used up (or consumed) by economic actors. The economic structure exists for the sole purpose of consumption.

Because of the importance of consumption, the actions of consumers provide the primary driving force in the operation of an economic system.

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