Unformatted text preview: o Firms—maximizes profit o Government—maximize votes o International—maximize profit o When income = spending, economy is in equilibrium o When income < spending, economy is expanding o When income > spending, economy is contracting For every economy, there are two sides: 1. Physical Activities – Real Economy 2. Nominal Economy Tax is a leakage from the economy, it contracts the economy....
View Full Document
- Spring '09
- Economics, Nominal Economy Tax