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June 28, 2022 

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ECONOMIC GOALS: The five basic conditions of the mixed economy that are generally desired by society. We typically divide these five into macro goals (full employment, stability and economic growth) and micro goals (efficiency and equity).

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CORPORATE PROFITS: The total accounting profits received by corporations. Corporate profits are the official item in the National Income and Product Accounts maintained by the Bureau of Economic Analysis that measures profit earned by the household sector for supplying entrepreneurship services to corporations. This also, to some degree, measures the payment for capital and land services, too. This is one of five official factor payments making up national income. The other four are compensation of employees, rental income of persons, net interest, and proprietors' income. Corporate profits the second largest factor payment category, usually coming it around 20-25% of national income.

     See also | corporation | accounting profit | National Income and Product Accounts | Bureau of Economic Analysis | household sector | entrepreneurship | capital | land | factor payments | national income | compensation of employees | rental income of persons | net interest | proprietors' income | normal profit |


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PRINCIPAL-AGENT PROBLEM

A disconnection or conflict between the objectives and goals of the principal and those of the agent authorized to represent the principal. The principal-agent problem arises because an agent is given the responsibility and authority to take actions that affect both the principal, but can also affect the agent. This problem is common in corporate management, where the principal is shareholders and the agent is managers. It is also common in government, where the principal is the public and the agent is elected leaders.

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[What's This?]

Today, you are likely to spend a great deal of time searching the newspaper want ads wanting to buy either a set of serrated steak knives, with durable plastic handles or a pair of blue silicon oven mitts. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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Parker Brothers, the folks who produce the Monopoly board game, prints more Monopoly money each year than real currency printed by the U.S. government.
"I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing. "

-- Ronald Reagan, 40th US president

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