ECON 1020H Lecture Notes - Lecture 2: Air Canada, Intermediate Good, Ceiling Fan
26 Jan 2017
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Document Summary
Lead indicators signs that the economy is going to do well. The canadian economy, as most market economy is divided into three groups: business, households, and government. Factor market: households supply factors of production to business and are paid by business for doing so. Goods(product) market: business produces goods and services and sells them to households and government. Injection = any spending flow that is not dependent on the current level of income: investment (spending on capital goods, exports, government. Leakage= income received within the circular flow that does not flow directly back: savings, taxes less transfer payments. Transfer payments = one way transactions; payment is made but no good or service given back in return: imports. Equilibrium= a state of balance of equal forces resulting in no tendency to change. National income equilibrium = that level of income where total leakages from the circular flow equal total injections. Value of productions = business receipts = aggregate expenditures.
