2. NATIONAL ECONOMY
NATIONAL ECONOMY (NE)
• economic activities within a country related to the
production, distribution and consumption of goods
and services in which all companies, citizens and
the state are engaged.
• NE is affected by:
– natural resources
– national wealth
– structure of population
– political and economical systems
• Sectors in the NE
• Economic decision-makers
• Factors that affect performance of national economy
• Economic indicators
Based on phases in the production chain:
- primary, secondary, tertiary, quaternary
Based on ownership:
- public, private, voluntary
Based on profitability:
- profit-making, non-profit, foundations
- Households – demand goods and services, supply
labour
- Companies – provide goods and services
- State – establishes rules, produces public goods,
distributes income
- “ The rest of the world“ – affects all activities
• Land (and natural resources) – used for farming and
building
• Labour – human time spent in production
• Capital – machines, roads, computers, etc.
• Know-how
ECONOMIC MEASURES
Gross domestic product (GDP)
- total market value of all final goods and
services within a country, usually in one year
National income (NI)
- total of all incomes of residents of a nation
consisting of wages, salaries, profits, rents and
interest