Spenda
Spenda is a term used in economic theory to denote a notional unit of spending or a simplified representation of a consumer’s purchasing capacity within a budgeting model. It is not a real currency; there is no issuer, no sovereign backing, and no market exchange rate. Spenda is used in pedagogy and thought experiments to isolate the decision rules that govern consumption and saving.
Origin and usage: The word is a portmanteau of spend and a generic unit, appearing in textbooks,
Modeling: In basic models, spenda can be viewed as a stock that is depleted by consumption and
Relation to real money: Spenda mirrors real-money decision processes but abstracts away friction from actual currencies,
Criticism: As an abstraction, spenda may oversimplify heterogeneity in consumer behavior and ignore institutional realities such
See also: Budget constraint, Consumer choice, Saving, Time preference, Microeconomics pedagogy.
Examples: In a classroom exercise, a student is given a monthly spenda of 100 units. With higher