《Economics from Miss Chen》Chp7.pptVIP

Chapter 7 Personal Economics 7.1 SOURSE OF INCOME IN MODERN ECONOMIES Personal income by individuals per period earning from selling the factors of production Components wage – personal labor rent – use of capital infrastructure (land – classical E) interest – use of money profit – enterprise or entrepreneurship (use of a good idea or running a business) 1. Investment Real investments purchases of machinery or productive capacity and purchases of land and improvements. Financial investments return income to the owner e.g. shares or equities, bonds or notes, deposits or loans 2. Payment from investment interests payments from bonds, notes, debentures, bank deposits, term loans dividends payments from shares dividend imputation Capital gain/Capital loss investors sell investments for more/less than they paid for them Transaction costs: stamp duty, brokers’ fees… Stamp Duty Definition a tax collected by means of stamp purchased and affixed (as a deck of playing cards); specially, such a tax on a document (as a deed or promissory note) Object economic contracts property right transference statements account book license and other warrants qualified by the Ministry of Finance Taxpayer contract makers account book makers credential makers 7.2 USE OF INCOMES Spend Durable goods: last at least 3 years, E.g. cars, washing machines, refrigerators, furniture… Non-durable goods: immediately consumed or have a relatively short life E.g. food, clothes, radio batteries… Save deposit into an account at a financial institution purchase of shares or units in a trust purchase of bond or debenture deduction from pay that goes into a superannuation fund 7.3 PLASTIC CARDS, CYBERCASH AND THE INTERNET Credit card allows its holder to make purchases without payment of cash immediately American Express, Diners Club, Mastercard, Visa Debit card allows its holder to have access to his own funds at financial institution EFTPOS, ATM Stored-value card (magnetic strip) enables holder to use