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GOVERNMENT SUBSIDIES LESS CURRENT SURPLUS OF GOVERNMENT ENTERPRISES: The difference between transfer payments from the government sector to the business sector and "profit" received by government-operated "firms." This composite item is one of several differences between national income (the resource cost of production) and gross (and net) domestic product (the market value of production) in the National Income and Product Accounts maintained by the Bureau of Economic Analysis. This item tends to be relatively small, invariably less than 1 percent of gross domestic product.

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Lesson 11: Circular Flow | Unit 2: Financial Markets Page: 8 of 22

Topic: Saving <=PAGE BACK | PAGE NEXT=>

Saving is a nonconsumption use of income, making a loan or supplying income to the financial markets in exchange for a legal claim.
  • The red financial markets box is a third set of aggregate markets.
  • The green flow is saving supplied to the financial markets. It is income diverted from the household sector.
Why save?
  • To get paid. Interest is the payment for using income.
  • Income is needed later more than now. Income is set aside this year to buy more production next year.
Saving does not disappear, it is income diverted away from the consumption flow and supplied, or loaned, to the financial markets.

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AUTOMATIC TRANSFER SERVICE ACCOUNTS

Deposit accounts offered by commercial banks, credit unions, savings and loan associations, and mutual savings banks that automatically transfer funds from interest-paying savings account to checking accounts when needed to process checks or to maintain minimum balances. Automatic transfer service (ATS) accounts effectively function as interest-paying checking accounts and are considered as one type of checkable deposits. Other checkable deposits are demand deposits (standard checking accounts), negotiable order of withdrawal (NOW) accounts, and share draft accounts.

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APLS

BLUE PLACIDOLA
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Today, you are likely to spend a great deal of time driving to a factory outlet looking to buy either a birthday greeting card for your grandmother or a coffee cup commemorating yesterday. Be on the lookout for high interest rates.
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During the American Revolution, the price of corn rose 10,000 percent, the price of wheat 14,000 percent, the price of flour 15,000 percent, and the price of beef 33,000 percent.
"Believe and act as if it were impossible to fail."

-- Charles F. Kettering

OAPEC
Organization of Arab Petroleum Exporting Countries
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