Surplus Spending Unit

Surplus Spending Unit
An economic unit with income that is greater than or equal to expenditures on consumption or real investment over the course of a period. A surplus spending unit will use its additional income to buy goods, invest, lend money to deficit spending units or pay off its own deficit from an earlier period.

Basically, a surplus spending unit earns more than it spends. Surplus spenders can be individuals, sectors, countries or even the whole economy.

The household sector usually represents a surplus spending unit, as this sector earns large portions of disposable income. Most households earn more income than necessary to purchase food, shelter and other basic necessities. As a result, they are able to purchase additional consumer products, hold money in banks, or invest in the stock market.


Investment dictionary. . 2012.

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