ECO 1102 Lecture Notes - Lecture 20: Autarky, Income Tax, Fixed Income

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: Gordon Lenjosek

Document Summary

The meaning and function of a financial system. The various roles institutions have in the economy. Why saving is equal to a closed economy . This can be described as a trade-off existing between a risk and a return because of their strong correlation. Fixed income is low risk while assets in a developing country are at a high risk for securing return. View slide 4 for formula regarding gdp income and total expenditure from the economy. Differences are present for an open versus a closed economy. For the purpose of this course we are focusing on a closed economy although most remain open. Types of saving: private - household, public tax revenue and government spending, national incorporates private and public spending together as it equals the portion that is not spent by either the household or the government. National saving investment formula on slide 6. Budget surplus: excess of tax revenue gained from government spending.