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July 17, 2018 

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KITCHIN CYCLE: A cycle of economic activity lasting between 3 and 5 years that acquired the name of the first economist to study it, Joseph Kitchin. The Kitchin cycle is attributed to investment in inventories (especially for consumer goods). It is the one that is commonly at work when people are concerned with business-cycle contractions. This is also one of four separate cycles of macroeconomic activity that have been documented or hypothesized. The other three are Juglar cycle, Kuznets cycle, and Kondratieff cycle.

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CURRENT SURPLUS OF GOVERNMENT ENTERPRISES:

The excess of revenue over cost received by government-operated firms that sell their output through markets and otherwise operate like private, profit-oriented firms. This is one component of the official entry government subsidies less current surplus of government enterprises found in the National Income and Product Accounts maintained by the Bureau of Economic Analysis, that separates national income (the resource cost of production) and gross (and net) domestic product (the market value of production).
Government enterprises are productive activities that operate much like private-sector firms. They hire resources and purchase inputs (intermediate goods and raw materials), then produce goods that are sold through markets. In some cases, government enterprises compete directly with private firms.

One common example of a government enterprise is a city-operated electrical generation and distribution system. In some cities, this service is provided by private, for-profit, businesses. In other cities it is provided by government. Other examples of government enterprises include urban transportation systems, parks and recreational facilities, and communication systems.

The primary difference between private firms and government enterprises, especially in the National Income and Product Accounts, is the treatment of profit. In a private firm, any profit generated (the difference between revenue and cost) is claimed by the owners, or the entrepreneurs. A government enterprise, in contrast, has NO specific owners to claim the profit. In essence the enterprise is owned by ALL citizens. As such, the "profit" of government enterprises is not earned by any specific factor of production. It is not considered part of national income.

From a practical standpoint, the excess of revenue over cost for a government enterprise, which is termed "surplus" rather than profit, is merely returned to the appropriate government treasury. Should the city's electric utility "turn a profit" in a given year, this surplus is given back to the city. This is fitting because should the electric utility incur a loss, then the city makes up the difference.

In terms of national income, the surplus of government enterprises is important because, unlike private business profit, it is NOT officially earned by any factors of production. Rather than being paid out as national income to any productive factors, this surplus is returned to the government treasuries. It is part of gross domestic product, but not part of national income.

<= CURRENT PRODUCTIONCYCLICAL UNEMPLOYMENT =>


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CURRENT SURPLUS OF GOVERNMENT ENTERPRISES, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: July 17, 2018].


Check Out These Related Terms...

     | national income and gross domestic product | national income and net domestic product | government subsidies less current surplus of government enterprises | government subsidies | government enterprises | capital consumption adjustment | indirect business taxes | net foreign factor income | business transfer payments | statistical discrepancy |


Or For A Little Background...

     | national income | gross domestic product | gross domestic product, income | production | product markets | National Income and Product Accounts | Bureau of Economic Analysis | National Bureau of Economic Research |


And For Further Study...

     | factor payments | circular flow | business cycles | gross domestic product, expenditures | gross domestic product, ins and outs | gross domestic product, welfare | gross national product | real gross domestic product | government functions | net domestic product | personal income | disposable income | gross domestic income |


Related Websites (Will Open in New Window)...

     | Bureau of Economic Analysis |


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