why do we use consumption over income?

Answers

We use consumption over income because it is a better indicator of a household's economic standing. Consumption reflects actual purchases made, whereas income reflects potential purchasing power. Consumption is also typically more stable than income, which can fluctuate due to seasonal and other temporary changes. Knowing how much a household has been consuming provides valuable insight into their day-to-day spending habits and gives a more accurate portrayal of their economic health.

Answered by Paige

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