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# Annual Consumption of Goods

# Definition

The total value of goods and services consumed by a nation's population in a given year, including both necessities and luxuries, which when compared to annual production determines whether national capital is being accumulated or depleted.

## Source Chapter

Book IV, Chapter 3

## Context

Smith argues that the relationship between annual consumption and annual production is a more accurate indicator of national economic health than the balance of trade, as it directly measures whether a society is living within its means.

## Economic Domain

Consumption

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