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25 Cards in this Set
- Front
- Back
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Circular Flow of Income and Expenditure
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HH FIRMS
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GDP is
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MARKET VALUE
During yr. or quarter Final goods within country PRODUCED goods |
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most % of GDP is
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consumption
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Factors of Production
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land
buildings labor capital entreprenuership |
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Say's Law
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supply creates its own demand
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Payments
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wages
profit rent Interest |
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Households choose
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what to consume
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Firms choose
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what/how to produce
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Flow from households to firms
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expenditure goods and services
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Flow of goods and services from firms to households through
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goods markets
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flow of...from households to firms
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factors of production
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...from firms to households through...
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factor incomes...factor markets
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Total Expenditure
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= total income
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Net Taxes =
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Total Income- consumption expenditure - saving
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Total Expenditure (income) =
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consumption expenditure + Investment + Govt. expenditure + Net Exports
(C + I + G + NX) |
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GDP =
(Expenditure Approach) |
C + I + G + NX
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Income Approach
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W
I =NDPAFC I D =GDP SD =GDP (EA) |
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Statistical Discrepancy =
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GDP Expenditure Total - GDP Income Total
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GNP=
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GDP + Net Factor Income from Abroad
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National Income =
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GNP- depreciation- statistical discrepancy
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Disposable Personal Income =
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National Income (households)
- Retained Profits +transfer payments - Personal Income taxes |
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% Disposable Personal Income of National Income =
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DPI/ National Income
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Next Exports =
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net income - consumption expenditure- investment- govt. expenditure on goods and services
(Y-C-I-G) |
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Net Exports =
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Exports - Imports
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Imports =
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Exports - Net Exports
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