ABSTRACT
The individual firm has no control over the spending power of its customers and potential markets. Spending power in a national economy is dominated by households and individual consumers. Personal income is therefore the most important element in spending power, wages and salaries making the biggest contribution.
Producers of capital goods sell principally to other businesses. Spending power in those markets is largely generated by company profits and to a lesser extent by funds raised from the banks and the stock markets.
Government spending is another source of spending power, as are foreign firms which make up the potential export market.
