Econ 104 National banks

Econ 104 National banks - Topic IV National Accounts Topic...

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Topic IV National Accounts Topic IV. National accounts GDP: The market value for all final goods and services produced within one country in a given period of time. Recall: Increases in GDP do not necessarily mean a country is better off. 1. Underground economy: Definition: A market consisting of all commerce on which applicagle taxes and/or regulations of trade are avoided. a. Highest impact is in countries during war times Rations make the black market flourish. High impact in countries with a lot of government corruption. - Illegal drugs - Prostitution - Babysitting - Lemonad e stands - Illegal firearms (weaponry) - Ga mbling - Copyrighted m at erial (ipod) - Any job working und er the table - Computer h ackers (software theft) - Illegal internet s ales: credit card and bank account nu m b ers b. 4 m ain underground econo my categories 1. Activities yielding incom e not reported to tax a uthorities o High tax rates encourag e workers to work “off the books” o Sale and distribution of illegal goods and services 2. Production which violates one or several m a nd ates - Inspection & label laws
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- Labor laws - Regulations on agriculture 3. Productive activity by individuals receiving transfer payments. - Social security benefits - Welfare payments 4. Productive activity by illegal aliens - Many pay income & other taxes - IRS does not compare records with immigration offices. - U.S.  encourages illegal immigrants to use the national banking system ** Banks benefit ** Helps U.S. to uncover “real” criminal activity c. Cost of the underground economy 3 ways to measure underground economic activity 1. Changes in the labor force participation rate. - One thing that has not changed….  The Labor Force Participation (LFP) of males aged   and over.   - In 1970 adult male LFP =  83% - In 2006 Adult male LFP =  75% Problems with measure: o Changes in working structure o More women working ( changes in family structure) o Changes in the retirement pattern 2. Change in the level of liquidity How much people hold in case rather then in checking accts, saving accts, etc. -
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This note was uploaded on 04/27/2009 for the course ECON 104 taught by Professor Shaffer during the Spring '08 term at Kansas.

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Econ 104 National banks - Topic IV National Accounts Topic...

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