Professional Documents
Culture Documents
Creation of Wealth
Creation of Wealth
either by paying for goods expected to be sold right away, or in anticipation of sales in
the future
Either way, for the most part those things sold will not be produced or cared for if
someone wasn’t going to buy them. Whether perishable items, most of which help
preserve some more durable form of wealth, like human capital, for instance. Or durable
forms of wealth are produced that will last beyond the current time period. It is the
“spending” that encourages the increased production and preservation of wealth.
So whether you spend it or not, in terms of money you will have the same amount of
money at the end of the given time period. which we can refer to as savings.
But with the spending you will increase the production of wealth. Either way, in the
macroeconomy, “Spending” is what leads to wealth production, “not spending” reduces
wealth production and does nothing to increase money saved. That money saved will
exist whether used for spending or not.