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Unformatted text preview: produced by permanent residents of a nation within a given period of time Consumption process of the household generates consumption expenditures that accrue to the firm (c) When you open the circular flow chart (open economy) we see government, rest of the world, and capital, see figure 12.2 in textbook • 3 types of savings: Households, governments firms • Open-Economy Accounts o The rest of the world interacts with the Mexican economy – foreigners’ account in Mexico’s Books Makes an expenditure in the form of its purchases of Mexico exports (E) Receives income in the form of Mexico’s purchases of imports (z) Makes an expenditure that accrues to capital in the form of foreign savings (Sf)...
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This note was uploaded on 05/08/2011 for the course IR 213 taught by Professor Staff during the Spring '08 term at USC.
- Spring '08