2. The Interaction among the Private and Public Sectors of the Economy Group 3 Hoi Wan Chan Jamie Desappio Lynean Graham Katarzyna Grabowska Marina Ristic Yi Shao

3. Question 5 How do the private sectors- households, business, and the international sector-interact in the economy? How do the private sectors- households, business, and the international sector-interact in the economy?

4. Financial Intermediaries Households Firm (Business Sector) Payment for Goods and Services Goods and Services Resources Services Payments for Resource Services SavingInvestment

5. The Household Sector Selling their resource services to business in exchange for money payments. Selling their resource services to business in exchange for money payments. Spending their income for goods and services produced by the firms. Spending their income for goods and services produced by the firms. Place the balance in savings vehicles via financial intermediaries. Place the balance in savings vehicles via financial intermediaries.

6. The Business Sector (Firms) Employing the services of resources in order to produce goods and services. Employing the services of resources in order to produce goods and services. Pay households for their resource services. Pay households for their resource services. Borrowing money from financial intermediaries expansion of their productive capacity. Borrowing money from financial intermediaries expansion of their productive capacity.

7. Households and business interact with each other by means of buying and selling.

8. Financial Intermediaries Households Firm (Business Sector) Foreign Countries (International Sector) Payment for Goods and Services Goods and Services Resources Services Payments for Resource Services Net Exports Payments for Net Exports Exports Imports SavingInvestment

9. The International Sector (Foreign Countries) Firms import goods and services from foreign countries and sell these goods and services to household. Firms import goods and services from foreign countries and sell these goods and services to household. Firms pay for goods and services from foreign countries. Firms pay for goods and services from foreign countries. Firms export goods and services to foreign countries. Firms export goods and services to foreign countries.

10. Question 6 How does the government interact with the other sectors of the economy? How does the government interact with the other sectors of the economy?

11. Financial Intermediaries Households Firm (Business Sector) Foreign Countries (International Sector) Payment for Goods and Services Goods and Services Resources Services Payments for Resource Services Net Exports Payments for Net Exports Exports Imports Saving Government (Public Sector) Investment Taxes Govt Svcs Resource SvcsGoods & Svcs Payment for Resource Svcs Payment for Goods & Svcs

12. The Public Sector (The Government) Households sell resources to the government in return for income Households sell resources to the government in return for income Business firms sell the goods and services the produce to the government for revenue Business firms sell the goods and services the produce to the government for revenue Taxes are the income the government receives from households and firms Taxes are the income the government receives from households and firms

13. Bank of America Programmers Dell China $50 MP3 Players, laptops Labor Wages $100 Net Exports $250 Exports Imports $130 U.S. Government $130 Taxes $20Taxes $50 Financial AidCharter LaborComputer Rental $100 $200

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