# 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 ---