Consumption is a key concept in economics and is often thought of as the most basic unit of economic activity. Consumption refers to the spending of money on goods and services. In economics, consumption is a broad concept that includes all spending on final goods and services, including durable goods (such as cars and refrigerators) and nondurable goods (such as food and clothing).

There are two ways to think about consumption: as a flow and as a stock. Flow measures refer to how much is consumed over a period of time, such as per year or per month. Stock measures refer to the total value of all goods and services that have been consumed over a period of time, such as at the end of a year or at the end of a person’s lifetime.