This section considers consumption and saving I behavior, beginning with individual spending patterns and then looking at aggregate consumption behavior, Recall from Chapter 21 that consumption (or, more precisely, personal consumption expenditures) is expenditures by households on final goods and services, Saving is that part of personal disposable income that is not consumed Consumption is the largest single component of GDP constituting 66 percent of total spending over the last decade

What are the major elements of consumption? Among lhe most important categories are housing. motor vehicles, food, and medical care. Table 22-1 displays the major elements, broken down into the three categories of durable goods, non durable goods, and services. The items themselves are familiar, but their relative importance, particularly the increasing importance of services, is wort a moment’s study.