ECON 201 Chapter Notes - Chapter 7: Disposable And Discretionary Income, Market Basket, Gdp Deflator
Document Summary
Econ 201 chapter 7 gdp and cpi. National income and product accounts keep track of flows of money between different sectors of the economy. This is via the factor market: government transfers; payments government give individuals, no goods or services in return, disposable income: income + gov transfers taxes, households don"t spend all their money. Private savings disposable income consumer spending: financial markets, government borrowing: the total amount of funds borrowed by the government. They use it to buy goods/services: gov purchases of goods/services: total purchases by government, exports, imports, foreign lending/borrowing. Inventories: stocks of goods/raw materials held to facilitate business operations. Investment spending: spending on productive physical capital and on changes to inventories. Because they change the ability of firm to make future sales. Intermediate ones are inputs for production of final g/s: to count both would be over counting. Flow of funds out of market for goods and services = total flow of funds into.