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