In this podcast we will cover the definition of the 5 sectors (household, business, public, financial, foreign), explaining how sectors interact and explaining which markets they interact with (product and resource). At the end of this podcast you will be able to contextualize the 5 sectors through real world examples and understand how the 5 sectors interact in the economy. As well as understand how businesses exchange products for money in the product market, how household exchange factors of production in the resource market for money, how banks can ease money shortages and how we can interact with sectors in other countries.
In this podcast we will cover:
Defining 5 relevant sectors (household, business, public, financial, foreign)
Explaining how sectors interact
Explaining which markets they interact with (product and resource)
Circular Flow: Business turn factors prod into products and sell back to the businesses
Closed Economy: A closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
Open Economy: A country will conduct trade with outside regions.
Factor Market: Markets where services of the factors of production (not the actual factors of production)are bought and sold
Product Market: The marketplace in which final goods or services are offered for purchase by consumers, businesses, and the public sector.