interdependence

interdependence

the dependence of two or more people or things on each other.

circular flow model

A model that shows the flow of goods and services and the interaction among households, producers, government, finance sector and the overseas sector.

households

consumers as individuals or in groups living under one roof

producers

The makers of goods and services in the country

government

the governing body of a nation that collects tax and spends money supporting goods and services.

finance sector

Consists of all financial institutions (banks and non-bank financial intermediaries) who engage in the borrowing and lending of money.

overseas sector

The sector containing overseas buyers of exports and suppliers of imports

export receipts

The money flow that represents the payment for the exports received by NZ

import payments

The money flow that represents the payment for the imports received by NZ

income

money received, especially on a regular basis, for work or through investments.

labour

productive work (especially physical work done for income)

goods and services

the objects consumers buy

consumption

household spending on goods and services

direct tax

a tax an individual pays directly to the government

indirect tax

a tax levied on goods or services rather than on households

government spending

spending by all levels of government on final goods and services

transfer payments

Benefits given by the government directly to individuals, such as welfare payments and benefits

loans for investment

Producers borrowing money to buy capital goods. eg machinery, vehicles, computers

interest

A sum paid or charged for the use of money or for borrowing money

savings

Portion of income not spent on consumption of goods and services

exports

Goods and Services sold to other countries

imports

goods and services purchased from other countries

primary sector

The portion of the economy concerned with the direct extraction of materials from Earth's surface, generally through agriculture, although sometimes by mining, fishing, and forestry.

secondary sector

The portion of the economy concerned with manufacturing useful products through processing, transforming, and assembling raw materials.

tertiary sector

the part of the economy that involves services rather than goods, distributing the goods to the consumer