9.20.10 - 9.20.2010 US Economy Private and Public Sectors...

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9.20.2010 US Economy: Private and Public Sectors Households as Income Receivers Functional Distribution of Income – indicates how the nation’s income is apportioned among wages, rents, interest, and profits According to the function performed by the income receiver Types of income Wages and salaries – 71% Rents – 1% Interest – 5% Proprietor’s Income – 9% Corporate Profits – 14% Personal Distribution of Income – indicates how the nation’s total income is divided among individual households Households as Spenders Personal Taxes – 13% Personal Saving – 1% Personal Consumptions Expenditures – 86% Durable goods – products that have expected lives of three years or more Nondurable goods – products that have lives of less than three years Services – work done for consumers by lawyers, barbers, doctors, lodging personnel, and so on Business Populations Plant – physical establishment Firm – organization that employs resources to produce goods and services for profit and operates one or more plants Multi-plant firms – several plants, same function Industry – group of firms that produce the same, or similar, products Vertically integrated firm – several plants, multiple different functions Conglomerate – many plants, several industries Legal Forms of Businesses Sole proprietorship – business owned and operated by one person Usually the owner personally supervises its operations Partnership – two or more individuals agree to own and operate a business together Usually pool their financial resources and business skills Share risks and profits or losses Natural outgrowth of the sole proprietorship
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9.20.10 - 9.20.2010 US Economy Private and Public Sectors...

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