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For example, if investment falls then manufacturing falls. but there is no investment in secondary markets.

Wouldn't recessions cause factories to collapse but why would they affect realtors, used cars, secondary retialers etc?

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When factories collapse, workers in those factories are out of jobs... no money means they can't afford to buy a used car, etc.

Update: To go back to the question in the title, consumption is also a part of the demand, and it includes consumption in services as well.

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  • $\begingroup$ But if services are the vast majority of the economy isn't that less important $\endgroup$ – user25084 Dec 4 '19 at 19:47
  • $\begingroup$ You can make that argument, but then "less" is a matter of relativity. Services also require investments: used car dealers need to build buildings and those wacky waving inflatable arm thing... Retailers, hospitals, Google, etc. need to invest in IT equipment. $\endgroup$ – Art Dec 4 '19 at 22:58
  • $\begingroup$ Sounds insignificant $\endgroup$ – user25084 Dec 4 '19 at 23:34
  • $\begingroup$ Please see an updated answer. $\endgroup$ – Art Dec 5 '19 at 1:25
  • $\begingroup$ So how would investment affect services $\endgroup$ – user25084 Dec 5 '19 at 2:29
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Yeah pretty much... The less investment exists the less investment demand matters.

In reality services collapse because they're useless but under demand economics this shouldn't matter. So recessions cannot occur if investment is zero.

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