ECO100Y5 Chapter Notes - Chapter 7: National Accounts, Disposable And Discretionary Income, Gdp Deflator

• School: UTM
• Department: Economics
• Course: ECO100Y5
• Professor: Michael H O

Document Summary

Almost all countries calculate a set of numbers known as the national income and product accounts. The national income and product accounts, or national accounts, keep track of the ows of money between different parts of the economy. Households earn income via the factor markets from wages, interest on bonds, dividends on stocks, and rent on land. A stock is a share in the ownership of a company held by a shareholder. A bond is borrowing in the form of an iou that pays interest. In addition, households receive government transfers from the government. Disposable income, total household income plus government transfers minus taxes, is available to spend on consumption or to save. Private savings, equal to disposable income minus consumer spending, is disposable income that is not spent on consumption. The banking, stock, and bond markets which channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing are known as the nancial markets.