The Rest of the World
The rest of the world affects what U.S. households consume and what U.S. firms
Japan and China supply us with manufactured goods affecting prices, wages, and
Not for profit Organizations
Some organizations try to maximize profits; others like cooperatives, try to minimize
costs. Some organizations have neither goals. Not-for-profit Organizations engage in
Households, with their demand for goods and services, determine what gets produced.
And their supplies of labor, capital, natural resources, and entrepreneurial ability
produce that output.
It is a two way s
At first households managed to provide their own goods and services, but in time
comparative advantage and specialization became more efficient and the firm became
established in the American economy.
When examining international trade, American buyers only care about the dollar cost.
To facilitate trade funded by different currencies, a market for foreign exchange has
The Role of Government
Market failure a condition that arises when the unregulated operation of markets
yields socially undesirable results.
The sources of market failure can be the biggest reason why gover
Sources of Government Revenue
Taxes at all levels of government provide the bulk of revenue.
o the individual income tax
o income and sales taxes
o the property tax
Types of Firms
There are about 30 million for-profit businesses in the U.S. 2/3 are small retail
businesses, small service operations, part-time home-based businesses and small
Each year more than a million new bus
The Role of the Household in Economy
Households as Resource Suppliers
Households can use resources to produce in their own homes goods and
services that would have been provided through the product market.
They can also p
Governments have made the political decision to provide these people with short-term
public assistance called transfer payments, which are outright grants.
Transfer Payments cash or in-kind benefits give
The interest rate the fed charges banks that borrow reserves
The demand for all goods and services in the economy at different prices
(Gross Domestic Public) The market value of all final goods and se