Module 10 Flashcards
National income and product accounts
Numbers tracking spending of consumers, sales of producers, biz investment spending, and government purchasing
Circular flow diagram
Flow of money, goods and services, and factors of production between households, firms, and markets
Household
Person or group of people who share income
Firm
Organization that produces goods and services for sale
Employs members of household
Product markets
Where households buy stuff from firms
Factor markets
Where firms buy resources ( capital and labor ) needed for production
Consumer spending
Household spending on goods and services in product markets
Factor markets
Where households sell use of their land, labor, and capital to firms in return for rent, wages, and interest payments
Stocks
Indirect ownership of capital uses by firm
Share in ownership of a company
Bonds
Loans to firms in form of IOU that pays interest
Government transfers
Payments the government makes to individuals without expecting a good or service in return
Disposable income
Income + government transfers - taxes
Amount of household income available for consumption or saving
Private spending
Disposable income - consumer spending
Amount people set aside
Financial markets
Where people put personal spending
Banking, stocks, bonds
Government borrowing
Amount of funds borrowed by the government if the finically market to buy goods and services
