ECON 1000 Lecture Notes - Lecture 1: Dry Cleaning, Final Good, Autarky
Document Summary
Total income of everyone in economy and total expenditure on what is produced. If closed economy, income equals expenditure because every $ a buyer spends is a dollar of income for the seller (circular flow) Factors of production (labour, land, capital and natural resources) Savings are leakage, financial system is injection. Households buy imports, leakage; firms export, injection. Taxes on wages, etc. , leakage, gov"t expenditure, injection. All measured in same unit (e. g. cdn), what they sell for in market. Things that don"t have markets (housework, things you do yourself) or are illegal are excluded. Goods (food, bikes, clothes) and services (dry cleaning, cell phone services, concerts) intended for the end user. Intermediate good used as components/ inputs in the production of the other good not included, value of intermediate good is already included in the value of final good. The thing that"s meant to be consumed is counted.