Question

what creates a link between production and consumption

Answer 1

if the production is much then the consumption automatically becomes much so they are closely related to each other. ...☺ HOPE u will understand

Answer 2

On a national scale, production is what a nation produces. Consumption is what the populace consumes. Therefore, the ultimate goal is to have production meet consumption standards so that the population is well taken care of. If those goals are not met then a nation has to import what it needs to survive. This happened to the Soviet Union when the communist regime could not feed its own people despite having Ukraine the “breadbasket of Europe”. The Soviets had to import grain from America, Canada and Argentina. This is one factor that led to the collapse of the Soviet Union and showed the world the failure of socialism. Other countries, however, do not meet their production goals and have to import what they need as well, and that leaves a trade imbalance, such as here in the U.S. between America and China. Today the U.S. imports many, many goods from China and our trade imbalance is in the billions. That is not good, as money flows out of the country and is going to China and other countries. This is because the manufacturing part of our economy is in a bad shape and manufacturing jobs are moving overseas at a very high rate. If this continues America will not manufacture anything anymore.