Economics		government with its sources of funds then makes purchases
Manage		expenditures for newly produced capital goods
Scarce resources		any spending by firms that maintains or increases the capital stock in the country
Unlimited wants		do not come from the expenditure of domestic households
Scarcity		finished goods and services produced for the final user
Opportunity cost		a government payment to individuals that does not represent a payment in exchange for currently produced goods and services
Microeconomics		to attain a level where everyone in the workforce, who is willing to work, can find employment
Macroeconomics		interaction between sellers and buyers of resources
Circular flow model		net change in value of unsold finished products, unfinished products and raw materials purchased by firms as yet unused in production
Market		to achieve very little sustained increase in the general price level i.e. low rates of inflation
Resource market		goods and services which are sold overseas
Product market		interaction between sellers and buyers of goods and services
Flow		decisions the economy must make
Stock		measures GDP by adding all the spending for final products during a period of time
Real flow		the next best alternative(s) forgone
Money flow		the flow of payments from firms to households and households to firms
Price		the study of how society manages its scarce resources in order to produce goods and services to satisfy its unlimited wants
Income (Y)		the flow of resources and goods and services
Consumption spending (C)		measuring the GDP on the basis of adding the final value of goods and services produced by each industry/sector
Savings (S)		payments for labour services
Taxes (T)		measures GDP by adding the incomes of all factors of production within a country in a given time period
Investment (I)		goods and services used as inputs for the production of final output
Net taxation (NT)		stabilising and reducing the size of the current account deficit and foreign debt while maintaining a fairly stable ER at an appropriate price level
Government spending (G)		the income earned by incorporated enterprises i.e. small companies
Exports (X)		payment made to the government
Imports (M)		a situation or place where interaction between buying and selling takes place
Withdrawals (W)		money received by households in the form of factor incomes
Injections (J)		a country's total savings by its residents
National savings		to lessen the degree of inequality and achieve a more fair and equitable distribution of income
Fixed investments		a rate of change in a quantity during a given period of time i.e. measured in units per time period
Changes in private sector inventories		the amount of income that households have after they have paid their taxes and bought their goods and services
Foreign investment		all different goods and services people want
Economic activity		inputs/factors of production needed to produce the goods and services wanted by society
Gross domestic product (GDP)		studies the decision making of the economy as a whole
Transfer payment		involve the production, distribution and consumption of goods and services
Purely financial transaction		goods and services which flow into the country
Intermediate products		the market value of all final goods and services produced within a nation's geographic borders during a period of time, usually a quarter or a year
Final products		represent only exchange of certificates of ownership (stocks) and not actual new production
The expenditure approach		gross profit of companies ( combination of interest earned by the capital, rent on land and profit earned by entrepreneurs
Net export		a relative concept
The income approach		the cost of producing the goods and services as well as profits for the firms
Compensation of employees		measures the value of output of final goods and services using the price that prevailed in some given year/base year
Gross operating surplus		net spending by foreigners
Gross mixed income		to ensure resources are well allocated and well utilised so that economic welfare is maximised
The output/production approach		savings made by foreigners in a country
Nominal GDP		part of the household income that is not passes on within the circular flow to businesses
Real GDP		studies how households and firms make decisions and how they interact in the market
Economic growth		the money spent by households to buy durable and non-durable goods and services
Full employment		to increase the capacity of the economy to produce in order to satisfy the unlimited wants of the people
Price stability / low rates of inflation		a quantity measured at one point in time
External stability / external balance		diagram showing the flow of resources from households to businesses and the flow of products from businesses to households and in exchange for these resources and products, money payments flow between businesses and households
More even distribution of income		taxes minus transfer payments
More efficient allocation of resources		measures the value of the output of final goods and services using price that prevailed at the time of measurement