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Economic Entity - Coggle Diagram
Economic Entity
Types
(on the basis of eco. decisions taken)
consumers
- consumes G& S for max. satisfaction
Households
-
group of people staying together & taking eco. decisions jointly
Functions
Supply Factor services & earn factor income
ex. FOP-land, labour, capital earn rent, wage, interest
Purchase consumer goods & services
Importance
Source of demand
Diversified products
Demand for services
Supply of factor services
Source of capital formation
Revenue to govt.
Government - the entity which controls the behaviour of all households & firms through its various regulatory bodies
Characteristics
aim is to provide max. social welfare Like HHs spends on var goods & provide diff services like defence, police, medical, water, cleanliness etc.
Invests in var capital projects like Firms, constructs roads, bridges, dams etc.
consumer as well as producer
Role of Govt. as an eco. agent
Supplies pub goods ex. park, bridges, dams
Spends on consumer goods ex. shoes, cloth, daily need items for people working in diff
Investment exp. ex. int
Regulates the total Money Supply
Eco Policies
Provision of health & education facilities
Firms(producers)
- units producing a good or a service to earn profit
Types
- Single proprietorship, Partnership, joint stock company, cooperative, state enterprise
Functions
Produce & sell G&S in exchange for money
purchase diff. FOP by paying factor prices
Importance
Increase in export earnings
Income& employment opportunities
Efficient utilisation of resources
Supply of G&S
Classification of producers
Secondary - engaged in the production of manufactured goods. Ex. Leather manufacturers, furniture maker, baker, weaver
Tertia - engaged in the production of var services required by primary & secondary producers . Ex. Teacher, laundry person, banker, doctor
Primary- produce goods by exploiting nat resources. Ex. farmer, dairy owner, butcher, fisherman
Foreign Sector - part of the economy concerned with overseas transactions
Exports, imports & international transactions
capital movements related to investment & banking transactions
portion of economy owned by foreigners
also called external sector/ rest of the world sector
Functions
acquire assets
take up responsibility & incur liability
participate in eco. activities
undertaking transactions with other eco. entities
Meaning
Institutional unit capable of doing economic activities independently