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macro / ch 8

8.1Economic Activity

2 min read · 1 section · 1 diagram

the circular flow of income model

  • leakages
    • household savings
      • part of consumer income that is not spent
      • place their savings in financial markets(banks)
    • imports
      • household spending that leaks out to the other countries that produce the goods and services
    • taxes
      • pay taxes to the government instead of buying goods and services
  • injections
    • exports
      • spending by foreigners who buy domestically produced goods and services
    • government spending
      • government spending on various activities comes back into the flow as injection
    • investment
      • spending mainly by firms for the production of capital goods (one of the four factors of production)
      • firms obtain funds from financial markets(often through loan) to finance investment, or the production of capital goods
      • Investment（投资）= 企业对“未来生产能力”的支出
        • here, it is real investment
        • 企业花钱去买：
          🏭 机器（machines）
          🏢 建厂房（factories）
          🚚 设备（equipment）
          📦 存货（inventory）
        • Investment refers to firms’ spending on capital goods, such as machinery and equipment, which increases future productive capacity.
  • the value of output produced in an economy is equal to the total income generated in producing that output, which is equal to the expenditures made to purchase that output
    • 生产出来的东西的价值 = 生产过程中赚到的钱 = 买这些东西花的钱
    • 1. 内圈（real flow)
      • households 提供 FOP（劳动力等）
      • firms 用这些去生产 goods & services
      • 👉 得到：total output（总产出）
        • the value of output produced in an economy
    • 2. 外圈 (money flow)

      • 👉 企业生产的时候，会付：

        Summary: 这些全部加起来 = total income

        • 工资 wages
        • 租金 rents
        • 利息 interests
        • 利润 profits

      • 👉 为什么 output = income？

        • 每一份产出，都是用FOP生产的
          👉 而使用FOP必须支付报酬(income)
        • 所以产出的价值 = 支付出去的收入
    • 3. 外圈 (money flow)
      • households 拿到 income 后会去买 goods & services
      • 这就是 total expenditure
      • 👉 为什么 income = expenditure？
        • households 把赚到的钱花出去, consumption expenditure = income received
          👉 firms 收到的钱就是销售收入
        • 所以收入 = 支出
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