Download presentation
Presentation is loading. Please wait.
Published byLouise Cunningham Modified over 9 years ago
1
Chapter 4
2
The Private Sector is made up of households, businesses, and the international sector. The public sector refers to activity by the various levels of government. Chapter 42
3
In the market system of the private sector, the consumer is supreme. In centrally planned economies, a government planning group decides what will and will not be produced. Chapter 43
4
Four different groups participate in our economy: Consumers Business firms Government Foreigners Chapter 44
5
Factor (Resource) markets are any place where factors of production are bought and sold. land, labor, capital, know-how Product Markets are any place where finished goods and services (products) are bought and sold. Chapter 45
6
6 The Circular Flow Resource Market BusinessesHouseholds Product Market Government Foreigners
7
The resource inputs used to produce goods and services Land, Labor, Capital, Know-how Productivity is output per unit of input such as output per labor hour. Chapter 47
8
Capital-intensive production uses a lot of tools & equipment Labor-intensive production uses a lot of people Human capital is the knowledge, skills & abilities possessed by the workforce. The knowledge and skills workers possess can be accumulated. Chapter 48
9
Sole Proprietorship Partnership Corporation Chapter 49
10
+ Easy + Freedom + Fast - Limited Finances - Must make all management decisions - Unlimited liability Chapter 410
11
+ Easy (but written agreements involved) + Management specialization + Less limited financial resources - Inconsistencies/disagreements - Still financially limited - Continuity difficult (i.e. death) - Unlimited liability Chapter 411
12
legal entities, distinct and separate from the owners + Effective at raising money--stocks, bonds, etc. + Easier to expand because easier to get money + Limited liability + Continuity Chapter 412
13
- Legal red tape and expenses - Easier to be abused (i.e. embezzlement) - Double taxation - Separation of ownership and control Chapter 413
14
For 2009 64% wages 6% interest 11% corporate profit 9% proprietors profit 2% rent Chapter 414 Source: www.bea.gov
15
There are over 115 million households in the U.S. Median Household Income: $50,502/year. Chapter 415 Source: factfinder.census.gov table s1901
16
Chapter 416 Source: factfinder.census.gov
17
Chapter 417
18
Chapter 418 Source: factfinder.census.gov
19
An income quintile is one-fifth of the population, rank-ordered by Income Distribution Chapter 419
20
Chapter 420 Source: www.census.gov
21
The top 20 percent (quintile) of U.S. households gets half of all U.S. income. The top 5% make 21.5% of the income. Chapter 421
22
For 2012: Taxes = 11.0% Savings = 3.5% Consumption = 85.5% Durable--Autos, furniture Non-durable--Food, clothes, gas Services--Medical care, housing, recreation Chapter 422 Data Source: www.bea.gov table 2.1www.bea.gov
23
Durable Goods = 10.8% Non-Durable goods = 22.8% Services = 66.4% Chapter 423 Source: www.bea.gov table 1.1.5www.bea.gov
24
Chapter 4
25
Federal income tax State sales tax & income tax Local property tax & sales tax Chapter 425
26
1. Providing a Legal Framework 2. Control Externalities 3. Protecting Consumers – maintain Competition 4. Protecting Labor Chapter 426
27
5. Redistribution of income Help Provide for those who can’t provide for themselves 6. Reallocation of resources Pollution Control, Education subsidies, Research Grants 7. Public Goods and Services Highways, Military and Police Protection 8. Stabilization Control Unemployment, inflation, etc. Chapter 427
28
Monetary policies – control money & credit Fiscal policies – spending & taxation Chapter 428
29
Payments to individuals for which no current goods or services are exchanged: Social Security Welfare Unemployment benefits Chapter 429
Similar presentations
© 2024 SlidePlayer.com. Inc.
All rights reserved.