BCC Macro 17 Ch 4,50

BCC Macro 17 Ch 4,50 - 4 The U.S Economy Public and Private...

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4 The U.S. Economy: Public and Private Sectors
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Households as Income Receivers Functional Distribution of Income-2005 Wages & Salaries Rents Interest Proprietor’s Income Corporate Profits Income By Function Performed National Income Received (Percent) 0 10 20 30 40 50 60 70 71% 1% 5% 9% 14% Source: Bureau of Economic Analysis
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Households as Income Receivers Personal Distribution of Income-2004 Lowest 20% Second 20% Middle 20% Fourth 20% Highest 20% Income Group (Households) Personal Income Received (Percent) 0 10 20 30 40 50 60 3.4% 8.7% 14.7% 23.2% 50.1% Source: Bureau of the Census
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Households as Spenders Household Uses of Income-2005 Personal Taxes Personal Saving Personal Consumption Income Group (Households) Household Income Expended (Percent) 0 10 20 30 40 50 60 70 80 90 12% 0% 88% 59% Composition of Consumption Services Nondurable Goods Durable Goods 12% 29% Consumption Divided Between… Source: Bureau of Economic Analysis
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The Business Population Plant Firm Industry Multiplant Firms Vertically Integrated Conglomerates
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Legal Forms of Business Sole Proprietorship Partnership Corporation Domestic Output by Business Type Percentage of Firms Percentage of Sales Sole Proprietorships Partnerships Corporations Sole Proprietorships Partnerships Corporations 72% 8% 20% 5% 11% 84% Source: U. S. Census Bureau
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LEGAL FORMS OF BUSINESSES Sole Proprietorship Easy to Organize Proprietor is Own “Boss” Taxed once Advantages Disadvantages Limited Resources No Help With Decision Making Unlimited Liability
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Forms of Business Organization Sole Proprietorship Tax $100,000 Revenue - $80,000 Expenses $ 20,000 Before Tax Profit -5,000 Tax at .25 Marg. Rate $ 15,000 After Tax Profit
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LEGAL FORMS OF BUSINESSES Partnership Easy to Organize More Management Skills Greater Resources Available Taxed once divided by partners Advantages Disadvantages Difficulty Making Decisions Possibly Limited Financial Resources Partnership Continuity Problems Unlimited Liability
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LEGAL FORMS OF BUSINESSES Corporation Most Effective Raising Capital - Stocks, Bonds Limited Liability Infinite Life Advantages Disadvantages Some Unscrupulous Practices Double Taxation Separation of Ownership & Control
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Corporate Org Chart Board of Directors C.E.O. President Manager Manager Worker Bee Worker Bee Worker Bee Worker Bee Worker Bee Worker Bee Manager Stockholders Auditor Fiduciary Duty Any decision made from here down Must be in the best interest of the stockholders
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Forms of Business Organization Corporation Tax $100,000 Revenue - $80,000 Expenses $ 20,000 Before Tax Profit -7,000 CorporateTax (35% CTR) $ 13,000 After Tax Profit (Dividend) $ 3,250 Tax (25% MR) Stockholder $ 9,750 After Tax Dividend
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LEGAL FORMS OF BUSINESSES Hybrid Structures Limited-Liability Company (LLC) S-Corporation Principal-Agent Problem
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This note was uploaded on 06/05/2009 for the course ECO ECO2013 taught by Professor Jominy during the Summer '08 term at Broward College.

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BCC Macro 17 Ch 4,50 - 4 The U.S Economy Public and Private...

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