Assignment need done

Comments for IP in Unit 2

The economy can be described by flows of funds between different sectors of the economy  The circular flow diagram describes the flows of money, products, and resources between different sectors of the economy.  The market economy creates three categories of markets

(1)  Markets for good and services (product markets)

(2)  Markets for inputs and factors of production (factor market)

(3)  Market for financial assets (stock and bond markets)

Note that the financial markets are absent.

The economy can be divided into four sectors;  each sector is associated with expenditures on domestic production: (i) domestic households that purchase currently produced consumer goods (Consumption), (ii) domestic firms that purchase currently produced capital goods (Investment), (iii) domestic government agencies that purchase currently produced public consumer goods and public capital goods (Government purchases of goods and services, and (iv)  foreigners that purchase currently produced domestic consumer and domestic capital goods ( domestic exports);  however, it is possible that the domestic purchases included foreign produced products.  The domestic purchases of foreign products are subtracted (domestic Imports) from total spending so that the purchases reflect only purchases of domestic production.  The closed circular model in the textbook has only the private households and private firms.  

Please note that the Close Circular Flow on page 29 show the private sector.   The International sector and the Government sector is absent.  Therefore, the Injections in a private economy is called Private Domestic Investment and the Leakages in a private economy is called Private Saving;   Leakages will equal Injections in a private economy:  S =  I   at equilibrium level of income.

The circular flow model or diagram can be a closed system with no foreign sector (page 29), or it can be an open system with a foreign sector (page 30).  In both closed model and open system in the textbook, the flow labeled “MONEY” represents purchased and expenditures in terms of domestic money.

(Note that the closed system and the open system ignores the financial markets .  Financial markets provide liquidity (cash) for making purchases as needed by all spenders.  Financial markets are discussed in Chapter4.  Financial markets are not included in this IP.)

Carefully read to learn about the meaning and importance of injections and leakages.   Name and list the leakages and injections in the closed system.  Name and list the leakages and injections in the open system. Address each task in the IP.

Comments for DB assignment

A “vehicle” in this DB assignment refers to financial assets that can “carry” the owner to better a financial position.  Vehicle is not referring to automobiles.

Various financial assets can be purchased but the array of specific financial assets is based on reducing the tax liability.   Prepare a memo to describe the different types of assets that can be purchased.  Each asset has a different implication for tax liability.   Use the Internet to find reputable information.   Dictionaries and encyclopedias should not be used as a source.   Begin each source and citation with the name of the author or with the name of the financial firm.  Use information from firms and financial planners that provide financial advice on buying a portfolio of assets, the source provides the name.  Separate the discussion into purchasing assets that can reduce tax liability for income tax, purchasing assets that can reduce capital gains liability, and purchasing assets that can reduce estate taxes. 

Grading Rubrics.   

Five points will be deducted for Late posting