Are all dollars not spent on forgein goods automatically spent on domesic goods?

Question

Are all dollars not spent on forgein goods automatically spent on domesic goods?

Answer 1

The poster above is correct.  Some dollars are spent (on both foreign and domestically made goods) some are saved, and some are invested.  They key to money is something called the velocity of money.  

Basically, velocity of money is when a guy in Michigan makes a car (keeping it in US to make it simpler) and gets paid for it.  He takes that money and buys an item from a vending machine, the guy who owns the vending machine goes out and buys a new car.  The cycle repeats (obviously things are MUCH more complex, but you get the basics here).  

If the guy making cars is afraid he's going to lose his job, he doesn't buy his candy and the owner doesn't buy his new car.  The velocity of money is said to slow down because people are worried about their financial situation.  If the velocity of money is high, the guy might be getting a promotion as the company expands and buy two candies from the vending machine.

Answer 2

but when they are saved at the bank, they can loan out like 10 times that amount.

Answer 3

Well, some aren't spent at all, they're saved or invested.