Different Sectors of Economy and Their Expenditures

Transcript

Different Sectors of Economy GOVERNMENT (Central Govt, State Govt and Govt Companies) HOUSEHOLDS (Customers. Employees etc) FIRMS (Manufacturers, Traders Service Providers (Manufacturers, Traders Service Providers EXTERNAL SECTOR Import, Export and Foreign Investment Different Expenditure by Households School Fees Internet Food Clothing Car House These are Services These are Goods These are Durable Goods This is Private Final Consumption Expenditure This is Gross Residential Construction Expenditure Different Expenditure by Firms On Purchase of Goods On Purchase of Fixed Assets Example Example Purchase of Mango by Jam Factory Purchase of Machine by Jam Factory This Purchase is For Sale This Purchase is For Use It is called Inventory Investment It is called Gross Business Fixed Investment Different Expenditure by Government On Paying Salaries to Govt Officers and Office Expenses On Preparing Roads, Bridges, flyovers This is Expenditure on Administration This is Expenditure on Infrastructure It is called Government Final Consumption Expenditure It is called Gross Public Investment What are Net Exports Export Import India Foreign Country Foreign Country India It means Selling goods from India to Foreign Country It means Purchasing from Foreign Country into India Difference between these two is called Net Exports Exports Less Imports = Net Exports Summary of Different Expenditures Summary of Different Sectors and their Expenditure Sector Household Firm Government External Sector Expenditure Private Final Consumption Expenditure Gross Residential Construction Expenditure Gross Business Fixed Investment Inventory Investment Gross Public investment Government Final Consumption Expenditure Exports-Imports Example (Exp on Purchasing different goods and service) Expenditure on House Purchasing Fixed Assets Purchasing of Stock Exp on Salary and other Administrative Service Expenditure on infrastructure Sale and Purchase from Other Countries What is Gross Domestic Capital Formation Sector Household Firm Government External Sector Private Final Consumption Expenditure Gross Residential Construction Expenditure Gross Business Fixed Investment Inventory Investment Gross Public investment Government Final Consumption Expenditure Exports-Imports Total of only these 4 is called Gross Domestic Capital Formation or Gross Investment