The Five-Sector Flow of Income Flashcards
Consumers
Consumers buy resources from producers to satisfy their needs and wants
Producers
Producers provide resources, goods and services for consumers, aiming to make a profit.
Financial Sector
Consists of banks and non-banking institutions such as credit unions, building societies and the stock market.
Government Sector
represents our federal government. It uses a mix of money from taxes paid by consumers, and money the government sets aside in its budget every year.
Overseas Sector
Represents the interaction between Australia and the rest of the world. It consists of trade in goods, services and foreign investment between nations.
Income (Y)
Consumers receive money from the producers in return for the work they do.
Resources
Consumers work as a factor of production.
Output
Goods and services.
Expenditure (E)
Consumers contribute to the economy by purchasing goods and services.
Savings (S)
Money consumers save instead of spending on goods and services.
Investment (I)
Money spent by producers on capital goods such as machinery and new technology.
Taxation (T)
Money all Australians must pay to the government sector.
Government Spending (G)
Money spent by the government to provide community needs and wants.
Imports (M)
Money made from the goods and services that Australians purchase from overseas producers. As a result, the money flows into overseas economies instead of Australians economy.
