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Chapter 4 outline - ECON 201 OUTLINE Chapter 4 The U.S...

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ECON 201  OUTLINE Chapter 4 – The U.S. Economy: Private and Public Sectors (Directions: Please read Chapter 4 and make notes according to this outline to prepare for  Exam 2.) I. (Preface)  Private vs. Public Sectors of the U.S. Economy a. Private Sector –   includes households and businesses b. Public Sector –  includes government II. Households as Income Receivers a. Functional Distribution of Income – indicates how the nation’s income is  apportioned among wages, rents, interest, and profit, according to the  function performed by the income receiver b. Personal Distribution of Income – indicates how the nation’s total income is  divided     among individual households III. Households as Spenders a. How do households dispose of their income (include percentages) i.    Personal taxes (13%) ii.    Personal Savings (1%) iii. Personal Consumption (86%)
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1. How do consumers divide their expenditures? (include  percentages) a. Durable goods- expected lives of  3+ years  (11%) b. Nondurable goods – lives of  >3 years
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