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RATE OF RETURN: The ratio of the additional annual income or profit generated by an investment to the cost of the investment. Here's a simple example, although the calculations are usually a great deal more involved for actual investments. If the cost of constructing a new factory is $10 million and it gives you an extra $1 million in profit each year, then its rate of return is 10 percent.
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SERVICES, CONSUMPTION: Personal consumption expenditures on activities that provide direct satisfaction of wants and needs without the production of tangible goods. Common examples are information, entertainment, and education. This is one of three categories of personal consumption expenditures in the National Income and Product Accounts maintained by the Bureau of Economic Analysis. The other two are durable goods and nondurable goods. Services are about 60 percent of personal consumption expenditures and 40 percent of gross domestic product. Services are consumption activities purchased by the household sector that generally provide for direct satisfaction without a physical, tangible product. Household expenditures on services are generally unaffected by business cycles. In good times and bad, the household sector continues to purchase services at a relatively constant pace.The four main categories of services in the National Income and Product Accounts are "housing," "household operation," "transportation," and "medical care." Housing and medical care are the two largest of these four categories, each about 25 percent of consumer expenditures on services. Household operation takes up 10 percent. And, transportation is the smallest of the four, at less than 8 percent. The services category of personal consumption expenditures is extremely diverse, as reflected by the size of the "other" category, which is in the neighborhood of 30 percent. A notable point about the services category of personal consumption expenditures is its size. Sixty percent of the expenditures made by the household sector and 40 percent of all purchases for GDP are services. This means that A LOT of economic production takes place each year that does NOT involve tangible products. This has not always been the way of the economic world. A hundred years ago, even fifty years ago, the vast majority of the productivity activity in the economy was the production of tangible products. Services, however, have become and will continue to be increasingly important. But do not be overly alarmed. The change in the mix of goods and services produced and consumed in the economy is a reflection of economic progress. Two hundred years ago, consumers were primarily concerned with acquiring food, clothing, and shelter. A hundred years ago, consumers had most of the food, clothing, and shelter needed, so they sought other tangible goods like cars and household appliances. Now, consumers have food, clothing, shelter, cars, and appliances, and what they seek is entertainment, education, and medical care. Being able seek these services means that consumers have come a long, long way in satisfying wants and needs. And that is progress.
Recommended Citation:SERVICES, CONSUMPTION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: November 2, 2024]. Check Out These Related Terms... | | | | | | | | Or For A Little Background... | | | | | | | | | | | | And For Further Study... | | | | | | | | | | | | | | Related Websites (Will Open in New Window)... | | |
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Today, you are likely to spend a great deal of time flipping through mail order catalogs trying to buy either a replacement remote control for your television or a replacement nozzle for your shower. Be on the lookout for infected paper cuts. Your Complete Scope
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Francis Bacon (1561-1626), a champion of the scientific method, died when he caught a severe cold while attempting to preserve a chicken by filling it with snow.
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"Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost. " -- John Quincy Adams, 6th US president
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NPV Net Present Value
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