Page 66 - Macroeconomics. book docx_Neat
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Households
Individuals or groups that provide factors of production and consume goods and
services.
Firms
Business units that produce goods and services using factors of production.
Factors of Production
Resources used in production, including labor, land, capital, and entrepreneurship.
Product Market
The market where goods and services are bought and sold.
Factor Market
The market where factors of production are exchanged for income.
Government Sector
The part of the economy that collects taxes and provides public goods and services.
Foreign Sector
The sector that represents economic relations with the rest of the world through
exports and imports.
Exports
Goods and services produced domestically and sold to other countries.
Imports
Goods and services produced abroad and purchased domestically.
Leakages
Withdrawals from the circular flow of income, such as saving, taxes, and imports.
Injections
Additions to the circular flow of income, such as investment, government spending, and
exports.
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