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33 Pages

ec26

Course: ECO 2013, Spring 2011
School: University of Florida
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Word Count: 1957

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Coursehero >> Florida >> University of Florida >> ECO 2013

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as Households Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms The U. S. Economy: 5 CHAPTER Private and Public Sectors Previous Slide End Show 5-1 Next Slide Copyright McGraw-Hill/Irwin, 2005 HOUSEHOLDS AS INCOME RECEIVERS Households as Income Receivers Households as Spenders FUNCTIONAL DISTRIBUTION The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms WAGES RENT PROFIT/LOSS INTEREST PERSONAL DISTRIBUTION Previous Slide End Show 5-2 Next Slide SHOWS ALLOCATION OF INCOME AMONG INDIVIDUAL HOUSEHOLDS Copyright McGraw-Hill/Irwin, 2005 HOUSEHOLDS AS INCOME RECEIVERS Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business FUNCTIONAL DISTRIBUTION $5,977 Billion 72% 9% 9% 8% 2% WAGES Public Sector: Governments Role Government Finance State & Local Finance Key Terms PROPRIETORS 757 Billion INCOME CORPORATE PROFITS INTEREST RENTS 2002 DATA 787 Billion 684 Billion 142 Billion Previous Slide End Show 5-3 Next Slide Copyright McGraw-Hill/Irwin, 2005 HOUSEHOLDS AS INCOME RECEIVERS Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business PERSONAL DISTRIBUTION Personal Income (Percent) Second 20% Income Group Middle 20% Income Group Fourth 20% Income Group Highest 20% Income Group Public Sector: Governments Role Government Finance State & Local Finance Key Terms 3.5% Lowest 20% Income Group 8.7% 14.6% 23.0% Previous Slide End Show 5-4 Next Slide 50.2% 2002 DATA Copyright McGraw-Hill/Irwin, 2005 HOUSEHOLDS AS SPENDERS Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business WHERE DOES OUR INCOME GO? 3% to personal saving Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5-5 Next Slide 2002 DATA $291 Billion Copyright McGraw-Hill/Irwin, 2005 HOUSEHOLDS AS SPENDERS Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business WHERE DOES OUR INCOME GO? 3% 13% to personal taxes Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5-6 Next Slide 2002 DATA $291 $1,114 Billion Billion Copyright McGraw-Hill/Irwin, 2005 HOUSEHOLDS AS SPENDERS Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business WHERE DOES OUR INCOME GO? 3% 13% 84% to personal consumption Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5-7 Next Slide 2002 DATA $291 $1,114 Billion Billion Copyright McGraw-Hill/Irwin, 2005 $7,304 Billion HOUSEHOLDS AS SPENDERS Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business COMPOSITION OF CONSUMER EXPENDITURES, 2002 Services $4,317 billion (59%) Public Sector: Governments Role Government Finance State & Local Finance Key Terms Durable Goods $872 billion (12%) Previous Slide End Show 5-8 Copyright McGraw-Hill/Irwin, 2005 Next Slide Nondurable Goods $2,115 billion (29%) THE BUSINESS POPULATION Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5-9 Next Slide Plant Firm Multiplant Firms Vertical Integration Conglomerates Industry Copyright McGraw-Hill/Irwin, 2005 THE BUSINESS POPULATION Households as Income Receivers Households as Spenders Business Shares of Domestic Output Percentage of Firms Percentage of Sales The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Corporations 20% Partnerships 8% Corporations 87% Sole Proprietorships 72% Previous Slide End Show 5 - 10 Next Slide Partnerships 9% Sole Proprietorships 4% Copyright McGraw-Hill/Irwin, 2005 LEGAL FORMS OF BUSINESSES Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Sole Proprietorship Public Sector: Governments Role Government Finance State & Local Finance Key Terms Advantages Easy to Organize Proprietor is Own Boss Limited Resources No Help With Decision Making Unlimited Liability Disadvantages Previous Slide End Show 5 - 11 Next Slide Copyright McGraw-Hill/Irwin, 2005 LEGAL FORMS OF BUSINESSES Households as Income Receivers Households as Spenders Partnership The Business Population Legal Forms of Business Easy to Organize Government Finance More Management Skills State & Local Finance Greater Resources Available Key Terms Public Sector: Governments Role Advantages Disadvantages Previous Slide End Show 5 - 12 Next Slide Difficulty Making Decisions Possibly Limited Financial Resources Partnership Continuity Problems Unlimited Liability Copyright McGraw-Hill/Irwin, 2005 Households as Income Receivers Households as Spenders LEGAL FORMS OF BUSINESSES Corporation The Business Population Legal Forms of Business Most Effective Raising Capital - Stocks, Public Sector: Governments Role Bonds Government Finance State & Local FinanceLimited Liability Key Terms Easy Expansion of Size & Scope Infinite Life Advantages Disadvantages Previous Slide End Show 5 - 13 Next Slide Corporate Regulations & Legal Expenses Some Unscrupulous Practices Double Taxation Separation of Ownership & Control Copyright McGraw-Hill/Irwin, 2005 LEGAL FORMS OF BUSINESSES Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5 - 14 Next Slide Hybrid Structures Limited-Liability Company (LLC) S-Corporation Principal-Agent Problem Copyright McGraw-Hill/Irwin, 2005 PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Providing the Legal Structure Maintaining Competition Monopoly Regulation Antitrust Regulated Monopolies Transfer Payments Market Intervention Taxation Public Sector: Governments Role Government Finance State & Local Finance Key Terms Redistributing Income Previous Slide End Show 5 - 15 Next Slide Copyright McGraw-Hill/Irwin, 2005 PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers Households as Spenders Reallocating Resources Market Failure Spillovers or Externalities Spillover Costs Legislation Specific Taxes Spillover Benefits Subsidize Consumers Subsidize Suppliers Government Provision The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5 - 16 Next Slide Copyright McGraw-Hill/Irwin, 2005 PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers Households as Spenders Reallocating Resources Market Failure Spillovers or Externalities The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5 - 17 Next Slide Private Goods - Rivalry Excludability Public Goods and Services Nonrivalry Nonexcludability Free-Rider Problem Quasi-Public Goods Copyright McGraw-Hill/Irwin, 2005 PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers Households as Spenders Promoting Stability Unemployment Circular Inflation Flow Revisited Adding the Government Sector The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5 - 18 Next Slide Copyright McGraw-Hill/Irwin, 2005 PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers Households as Spenders $ COSTS The Business Population NET TAXES FLOW Legal Forms of TO GOVERNMENT Business FROM BUSINESSES Public Sector: Governments Role Government Finance State & Local Finance Key Terms $ INCOMES GOVERNMENT RESOURCE GOODS & SERVICES MARKET FLOW TO BUSINESSES INPUTS RESOURCES BUSINESSES GOVERNMENT HOUSEHOLDS GOODS & SERVICES Previous Slide End Show 5 - 19 Next Slide GOODS & SERVICES PRODUCT MARKET $ REVENUE Copyright McGraw-Hill/Irwin, 2005 $ CONSUMPTION PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers Households as Spenders $ The Business Population COSTS GOODS & SERVICES Legal Forms of Business FLOW TO HOUSEHOLDS Public Sector: Governments Role FROM GOVERNMENT Government Finance RESOURCES State & Local Finance Key Terms $ INCOMES NET TAXES FLOW RESOURCE TO GOVERNMENT MARKET FROM HOUSEHOLDS INPUTS BUSINESSES GOVERNMENT HOUSEHOLDS GOODS & SERVICES Previous Slide End Show 5 - 20 Next Slide GOODS & SERVICES PRODUCT MARKET $ REVENUE Copyright McGraw-Hill/Irwin, 2005 $ CONSUMPTION PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers Households as Spenders $ The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms COSTS RESOURCE MARKET $ INCOMES RESOURCES INPUTS BUSINESSES GOVERNMENT HOUSEHOLDS Previous Slide End Show 5 - 21 GOODS & SERVICES EXPENDITURES FLOW TO Next Slide ACQUIRE RESOURCES $ REVENUE Copyright McGraw-Hill/Irwin, 2005 PRODUCT MARKET FLOW TO GOVERNMENT $ CONSUMPTION GOODS & RESOURCES SERVICES PUBLIC SECTOR: GOVERNMENTS ROLE Households as Income Receivers GOVERNMENT Households as Spenders $ COSTS EXPENDITURES The Business Population FLOW TO Legal Forms of Business PRODUCT MARKET Public Sector: Governments Role Government Finance State & Local Finance Key Terms GOODS & SERVICES FLOW TO$ INCOMES RESOURCE GOVERNMENT MARKET RESOURCES INPUTS BUSINESSES GOVERNMENT HOUSEHOLDS GOODS & SERVICES Previous Slide End Show 5 - 22 Next Slide GOODS & SERVICES PRODUCT MARKET $ REVENUE Copyright McGraw-Hill/Irwin, 2005 $ CONSUMPTION GOVERNMENT FINANCE Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Purc e & Trans rs has s fe Transfer Payments Percent of U.S. Output Government Purchases Exhaustive Nonexhaustive 35 30 25 20 15 10 5 0 ~ 5% ~ 22% 1960 ~12% ~ 18% 2002 2002 Data Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5 - 23 Next Slide Copyright McGraw-Hill/Irwin, 2005 Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Pensions and Income Security National Defense Health Interest on Public Debt Pensions & Income Security National 38% Fe ral Expe de nditure s FEDERAL FINANCE Previous Slide End Show 5 - 24 Next Slide All Other 15% Interest 9% Total Defense 17% Expenditures Health $2,011 Billion 21% 2002 Data Copyright McGraw-Hill/Irwin, 2005 Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Personal Income Tax Marginal Tax Rate Average Tax Rate Personal Income Tax 46% Fe ral Tax Re nue de ve s FEDERAL FINANCE Previous Slide End Show 5 - 25 Next Slide Copyright McGraw-Hill/Irwin, 2005 2002 Data Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Personal Income Tax Payroll Tax Corporate Income Taxes Excise Taxes Excise Taxes 4% Fe ral Tax Re nue de ve s FEDERAL FINANCE Personal Income Tax 46% Payroll Taxes 38% Previous Slide End Show 5 - 26 Next Slide All Other 4% Corporate Total Tax Revenues $1,853 Billion 2002 Data Income Tax 8% Copyright McGraw-Hill/Irwin, 2005 Households as Income Receivers Households as Spenders StateRe nue ve s STATE AND LOCAL FINANCE The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Previous Slide End Show 5 - 27 Next Slide Sales & Excise Taxes ~ 47% State Income Taxes ~ 36% Corporate Income Taxes License Fees Lotteries Intergovernmental Grants ~22% State Owned Utilities/Stores Copyright McGraw-Hill/Irwin, 2005 Households as Income Receivers Households as Spenders StateExpe nditure s Education Public Welfare STATE AND LOCAL FINANCE ~ 36% ~ 25% ~ 8% ~ 8% ~ 5% The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Health and Hospitals Highways Public Safety Previous Slide End Show 5 - 28 Next Slide Copyright McGraw-Hill/Irwin, 2005 Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Property Taxes Sales & Excise Taxes Lo al Re nue c ve s STATE AND LOCAL FINANCE Previous Slide End Show 5 - 29 Next Slide Education Welfare, Health, and Hospitals Public Safety Housing, Parks, and Sewerage Highways Copyright McGraw-Hill/Irwin, 2005 Lo al Expe c nditure s 72% 17% 44% 12% 11% 8% 5% Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Sources ofs Lo al Expe c nditure Education Proprietary Welfare, Health, and Incomes Hospitals Public Safety Housing, Parks, and Sewerage Highways Copyright McGraw-Hill/Irwin, 2005 Property Taxes Sales & Excise Taxes Lo al Re nue c ve s STATE AND LOCAL FINANCE 72% 17% 44% 12% 11% 8% 5% Previous Slide End Show 5 - 30 Next Slide FISCAL TRANSFERS Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Public Sector: Governments Role Government Finance State & Local Finance Key Terms Intergovernmental Grants Federal Transfers & Grants State Grants to Local Governments Previous Slide End Show 5 - 31 Next Slide Copyright McGraw-Hill/Irwin, 2005 functional distribution of income functional personal distribution of income durable goods non-durable goods services plant firm industry sole proprietorship partnership corporation stocks bonds limited liability double taxation principal-agent problem Copyright McGraw-Hill/Irwin 2005 monopoly spillover costs spillover benefits public goods free-rider problem quasi-public goods government purchases transfer payments personal income tax marginal tax rate average tax rate payroll taxes corporate income tax sales & excise taxes property taxes BACK END Households as Income Receivers Households as Spenders The Business Population Legal Forms of Business Next: Public Sector: Governments Role Government Finance State & Local Finance Key Terms The United States in the Global Economy Previous Slide End Show 5 - 33 Next Slide Chapter 6 Copyright McGraw-Hill/Irwin, 2005

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