Rocafor, John Romer R.

BSED-MATH 401
3 Sets of Policy
Monetary policy is the process by which the monetary authority of a country, like the central
bank or currency board, controls the supply of money, often targeting an inflation rate or interest
rate to ensure price stability and general trust in the currency
Fiscal policy is the means by which a government adjusts its spending levels and tax rates to
monitor and influence a nation's economy. It is the sister strategy to monetary policy through
which a central bank influences a nation's money supply.
Trade Policy Laws related to the exchange of goods or services involved in international trade
including taxes, subsidies, and import/export regulations.
These policies are specific to each country and are formulated by its public officials. Their aim is
to boost the nation's international trade. A country's trade policy includes taxes imposed on
import and export, inspection regulations, and tariffs and quotas

Capital outflow is an economic term describing capital flowing out of (or leaving) a particular
economy. Out flowing capital can be caused by any number of economic or political reasons but
can often originate from instability in either sphere

In economics, capital inflow is the amount of capital coming into a country, for example in the
form of foreign investment.

The circular flow of economic activity is a model showing the basic economic relationships
within a market economy. It illustrates the balance between injections and leakages in our
economy The circular flow model shows where money goes and what it's exchanged for.

The circular flow of income is a neoclassical economic model depicting how money flows
through the economy. In the simplest version, the economy is modeled as consisting only of
households and firms. Money flows to workers in the form of wages, and money flows back to
firms in exchange for products

Economic Model of Production

Stock is a type of security that signifies ownership in a corporation and represents a claim on
part of the corporation's assets and earnings. There are two main types of stock: common and
preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to
receive dividends.
Flow The circular flow of income or circular flow is a model of the economy in which the major
exchanges are represented as flows of money, goods and services, etc. between economic agents
Wealth measures the value of all the assets of worth owned by a person, community, company
or country. Wealth is determined by taking the total market value of all physical and intangible
assets owned, then subtracting all debts. Essentially, wealth is the accumulation of resources
Income is money that an individual or business receives in exchange for providing a good or
service or through investing capital. Income is consumed to fuel day-to-day expenditures. Most
people age 65 and under receive the majority of their income from a salary or wages earned
from a job

2 Economics Unit
Household A single dwelling will be considered to contain multiple households if either meals
or living space are not shared. The household is the basic unit of analysis in many social,
microeconomic and government models, and is important to the fields of economics and
inheritance.

Firm is a business organization, such as a corporation, limited Liability Company or partnership

that sells goods or services to make a profit.

Basic Economics Activities

Production is a process of workers combining various material inputs and immaterial inputs
(plans, know-how) in order to make something for consumption (the output). It is the act of
creating output, a good or service which has value and contributes to the utility of individuals
Consumption is distinct from consumption expenditure, which is the purchase of goods and
services for use by households
Employment can also be defined as any economic situation that is devoid of cyclical or
deficient-demand unemployment. Cyclical unemployment is the fluctuating type of
unemployment that rises and falls within the normal course of the business cycle
Income Generation. An intervention which imparts vocational skills or provides capital or
commodities that enhance the capacity of individuals or groups to generate income