The subjects (actors) in economic study are households, business companies, the government (the state), and foreign countries.Households offer their "factors of production" to companies. This includes labor, land,capital (things like machines and buildings) and information. In exchange for their factors of production, households get income which they use to consume (buy) goods from firms representing consumption expenditure.
Business companies produce and sellgoods andservices and buy factors of production from households and from other companies.
The state orpublic sector includes institutions and organisations. The state takes some of the earnings from the business companies and households, and uses it to pay for "public goods" likestreet lights or defense systems, to be available for everyone. The last subject isforeign countries. This includes all households, business companies and state institutions, which are not based in one's own country. They demand and supply goods from abroad.
The objects (things acted upon) in economic study areconsumer goods, capital goods, and factors of production. Consumer goods are classified as "usage goods" (for example, gasoline or toilet paper), as "purpose goods" (for example, a house or bicycle), and as "services" (for example, the work of a doctor or cleaning lady). Capital goods are goods which are necessary for producing other goods. Examples of these are buildings, equipment, and machines. Factors of production are work, ground, capital, information, andenvironment.
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