Four / 4 Sector Economy In Revenue Flow Cycle (Circular Flow) - Basic Economic Lesson

Submitted by godam64 on Sun, 02/12/2007 - 03:36

In an economy's income stream cycle is divided into four main areas or sectors as economic actors in which each sector has the interaction of each in creating income and expenses. 1. Household Sector Comprised of individuals who are homogeneous. a. Relationship with the Company - Household purchases of goods and services produced by the company for consumption. - Households receive income in the form of salaries, wages, rents, dividends, interest, etc. of the company. b. Relations with Government - Household saved approximately depositing money in taxes. - Household receives revenue in the form of salary, interest, non-remuneration income, etc.. c. Relations with the World International - Import household goods and services from abroad to make ends meet. 2. Corporate Sector Combined units of activities that produce goods and services. a. Relationship to household - The company produces products barupa goods and services consumed by the public. - Companies give penghasilah and benefits to households barupa salaries, dividends, rent, wages, interest, etc.. b. Relations with Government - The company pays taxes to the government. - Companies selling products and services to the government. c. Relations with the World International - The company to import goods and services from abroad. 3. Government Sector It acts as a policy maker and regulator communities and businesses. a. Relationship to household - The government accepted tax payments for the operational needs of the household, construction, and others. - Government b. Relationship with the Company - The government gets tax revenue from employers. - The government buys products from companies based fund existing budget. 4. World Sector International / Foreign Affairs relationship of exports and imports of goods and services to foreign countries. a. Relationship to household - The international supply of goods and services for the benefit of the household. b. Relationship with the Company