مقدمة في الاقتصاد

Introduction to Economics

• Economic Agents and their Relationships:
  • Economic agents are the central figures in economic decisions and activities.
  • They are individuals or organizations involved in economic activity.

Types of Economic Agents

• Households (Families):

  • The basic unit of society, consisting of two or more people related by family ties living together.
  • They have the will to live together(shared income and expenses)
  • Represent the entire population.
  • Classification of population:
    • Geographic Boundaries: Residents (within the country's borders) vs. Non-residents (outside the country's borders).
    • Activity:
      • Active Population: Individuals offering work contributing to tangible value creation (e.g., steel workers, cable companies, sugar producers).
      • Inactive Population: Individuals offering work contributing to intangible value creation (e.g., unemployed, retirees, students, teachers).
  • Contribution to the economy:
    • Consumption expenditure (using part of income for goods and services)
    • Saving (the surplus after consumption)
    • Investment (using savings)
    • Taxation (paying taxes and fees)

• Economic Enterprises:

  • Definitions vary depending on economic approaches.
  • Generally considered a social and economic unit with production functions, aiming for sustainability. (e.g. Agriculture, Industry, Services).
  • Legal forms (public, private, mixed).
  • Contribution to the economy:
    • Production of goods and services & value added
    • Investment for updating production tools
    • Taxation (paying taxes and fees)

• Financial Institutions:

  • Institutions gathering deposits from surplus agents and lending/investing to obtain returns(e.g., banks, savings funds, insurance companies).
  • Contribution to the economy:
    • Fund raising (collecting deposits from economic agents)
    • Lending (offering loans with interest) in return for income (interest)
    • Taxation (paying taxes and fees)

• Public Administration:

  • Made up of legal entities involved in the economy, offering services (e.g., education, security, justice) mostly free of charge by redistribution of income and wealth (taxes, fees, subsidies).
  • Contribution to the economy:
    • Providing services to individuals and society
    • Raising revenues through taxes and fees
    • Consumption of goods and services from businesses
    • Investing in various sectors
    • Categorization (various government bodies, local communities, administrative institutions, social security systems).

• Foreign Sector:

  • Economic agents outside the country, participating in economic activities with domestic agents through international trade rules.
  • Essential for open economies.

Economic Flows

• Economic Flows: The movement of goods, services, and funds between economic agents.
• Types of Flows:
  • Real/Physical: The movement of goods and services between agents.
  • Monetary/Financial: The flow of money between agents.

Markets

• Market: A place (physical or virtual) where buyers and sellers meet to exchange goods or services.
• Types of Markets:
  • Goods and Services Market
  • Labor Market
  • Capital Market

Economic Cycle

• Economic Cycle: A schematic representation of relations between economic agents and resulting economic flows.

Economic Equilibrium

• Maintaining a balance between supply and demand in all markets involved in the economic cycle.