Download ECONOMIC AGENTS

ECONOMIC AGENTS
People, human groups, and institutions must work
together so that economy works. They are the
economic agents or actors
Families.
 It refers to the groups of people who take part in economic
acts:
 They consume goods and services. They influence on demand
and prices, since inflation depends on how much demand is
on some products.
 They are part of the factors of production since they are
workers. They salaries they get for their jobs are their essential
income. Families have a budget that balances income and
expenses.
DEFINITIONS
 INFLATION: sustained increase in the general level of prices
for goods and services. It is measured as an annual percentage
increase (IPC).
 IPC: Índice de Precios al Consumo.
 BUDGET: An estimate of costs, revenues, and resources over
a specified period, reflecting a reading of
future financial conditions and goals.
Companies.
 They are the organisations that produce services or goods to
get economic profits by selling them in the market:
 Companies are mostly owned by several people; hence they are
called societies and their owners and shareholders since they
just own a part of the company.
 When companies are owned by just one person they are sole
proprietorships
 They have expenses because they must pay their workers and all
the raw materials as well as the machinery they need for their
production.
 Their income is obtained by selling their products in the market
or by offering some services
 Profits are obtained when there is more income than expenses
DEFINITIONS
 PROFITS: The surplus remaining after total costs are
deducted from total revenue, and the basis on which tax is
computed and dividend is paid. It is the best
known measure of success in an enterprise.
State
 It intervenes in economy by regulating the market or by
imposing taxes:
 The main objective is to get the highest possible standards of
living for the greatest amount of people. It enacts economic
laws such as setting minimum wage, controlling monetary
policy...
 It can also be a producer when it owns some companies (it is
common in the communist countries and less usual in the
capitalist ones).
 It also provides essential services for people, such as education,
healthcare...