How_Money_Works_-_The_Facts_Visually_Explained

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GOVERNMENT FINANCE AND PUBLIC MONEY

Attempting control

DOMESTIC

EXPENDITURE

Amount spent by firms,

households, and the

government.

FOREIGN BALANCE

Difference between

exports and imports.

NATIONAL INCOME

Total earned by households,

firms, the government, and

the foreign balance.

Government

spending

Amount spent by

the government.

See pp.128–129

Imports

Purchases from the

rest of the world.

See pp.136 –137

Exports

Purchases by the

rest of the world.

See pp.136 –137

National income

National income is the total

amount earned by every sector

of the economy and from the

foreign balance (also known

as the balance of payments).

National income accounting

is a method that a national

government uses to measure the

level of a country’s economic

activity in a given time period.

Income equals expenditure

The idea of national income

means that every penny spent

in one part of the economy

must equate to a penny earned

elsewhere, and the economy’s

total earnings must match its

total spending. This basic idea

allows economists to build

and study models such as

the MONIAC machine.

NATIONAL INCOME ACCOUNTING

US$4.29

trillion

Japan’s Gross National

Income (GNI) in 2015

GOVERNMENT

REVENUE

Amount taken by the

government in taxes.

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