Why expanding domestic demand will promote economic growth

In view of hypothesis 1: In the early days when there was no currency, society at that time was mainly based on barter exchange. Everyone was a producer, and only excess products could be exchanged. It can be seen that if you need to exchange for other people's products, you must improve your own production level, which will objectively improve the development of productivity and promote social and economic development.

In view of Hypothesis 2: First, during the period of economic development, the central bank will increase the amount of money and circulation velocity to lay the foundation for social and economic development. On the contrary, during the period of economic overheating, the central bank will implement deflation to suppress economic development. .

We can know that consumption can promote production. If a country has strong consumption power, it will inevitably push producers to increase production. At the same time, there are two ways to increase production. One is to improve production technology and the other is to pass Hire more labor, which not only promotes employment, but also increases labor productivity. This is why domestic demand is the troika that drives the economy.

The above are some of my own understandings. Hope this helps the original poster.