underconsumption Definition
an economic theory that suggests that periodic crises arise when aggregate consumer demand falls short of the amount of goods and services produced, leading to a loss of jobs and economic stagnation.
Using underconsumption: Examples
Take a moment to familiarize yourself with how "underconsumption" can be used in various situations through the following examples!
Example
Underconsumption is one of the causes of economic recession.
Example
The underconsumption theory argues that the root cause of economic downturns is insufficient consumer spending.
Example
Some economists believe that underconsumption can be addressed through government intervention.
Summary: underconsumption in Brief
'Underconsumption' [ˌʌndərkənˈsʌmpʃən] is an economic theory that explains how periodic crises occur when the total demand for goods and services by consumers falls short of the amount produced, leading to job losses and economic stagnation. The theory suggests that insufficient consumer spending is the root cause of economic downturns, which can be addressed through government intervention.
