Economic agents and the circular flow
The six institutional sectors, what each one does, the real and monetary flows that link them, the three markets of the circular flow, disposable income and the savings rate.
- 25 cards
- 6 topics
- Free
The outline, topic by topic
Each topic is weighted the way the exam weighs it.
- Concepts
- Questions
- Sort and link
- The numbers
- Scenarios
- Understand
A few cards from the deck
Economic agent: what is it?
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A person or organisation that takes economic decisions: producing, consuming, saving, investing or redistributing.
Millions of individuals cannot be followed one by one: they are grouped by main function, which gives the institutional sectors.
A firm pays wages to households. Which real flow goes the opposite way?
- The labour supplied by households
- The goods produced by the firm
- Household savings
- Taxes paid to the state
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The labour supplied by households
The wage is a monetary flow from firms to households; its opposite real flow is labour. The goods sold answer consumer spending instead.
The six institutional sectors are households, non-financial corporations, financial corporations, general government, non-profit institutions and the ….
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The six institutional sectors are households, non-financial corporations, financial corporations, general government, non-profit institutions and the rest of the world.
The rest of the world groups all non-resident units: a German customer buying from a French firm is an export.
Institutional sector: what is it?
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A grouping of units with the same economic behaviour, used by national accounts to describe the economy.
There are six: households, non-financial corporations, financial corporations, general government, non-profit institutions serving households, and the rest of the world.