Chapter 7 Summary

Chapter 7 Summary - Chapter 7 Summary - Economists keep...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 7 Summary - Economists keep track of the flows of money between sectors with the national income and product accounts, or national accounts. Households earn income via the factor markets from wages, interest on bonds, profit accruing to owners from stocks, and rent on land. In addition, they receive government transfers from the government. Disposable income, total household income minus taxes plus government transfers, is allocated to consumer spending C and private savings. Via the financial markets, private savings and foreign lending are channeled to investment spending I, government borrowing, and foreign borrowing. Government purchases of goods and services G are paid for by the tax revenues and any government borrowing. Exports X generate an inflow of funds into the country from the rest of the world, but imports IM lead to an outflow of funds to the rest of the world. Foreigners can also buy stocks and bonds in the U.S. financial markets.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/24/2012 for the course ECON 2105 taught by Professor Iacopetta during the Spring '08 term at Georgia Tech.

Ask a homework question - tutors are online