4 Sectors of Economy
Firm Gives Goods & services
Consumers are the factors of Production
Salary = Expense+savings
Savings = banks provide(Invests) those savings as loans to firms
Leakages - When money kept in Household but not invested
Stocks & Flows
Any economic variable which has been accumulated as a specific point of time for flow is stock
The variable which increases or decreases the stock
Change from savings o investment is capital formation
Dependency Ratio = Ratio of the people who are dependent / independent People
Thus National Income is defined as the money value of all the final goods & services produced in an economy during an accounting period of time generally one year
- Firm
- Consumers
- Government
- External/International Market
Firm Gives Goods & services
Consumers are the factors of Production
Salary = Expense+savings
Savings = banks provide(Invests) those savings as loans to firms
Leakages - When money kept in Household but not invested
Stocks & Flows
Any economic variable which has been accumulated as a specific point of time for flow is stock
The variable which increases or decreases the stock
Change from savings o investment is capital formation
Dependency Ratio = Ratio of the people who are dependent / independent People
Thus National Income is defined as the money value of all the final goods & services produced in an economy during an accounting period of time generally one year
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