What is instutional unit? What is instutional sector? And types of instutional unit and instutional sectoe

Answer 1

An institutional unit is an economic entity that is capable of owning assets, incurring liabilities, and engaging in economic activities and transactions with other units. It can be a person, a group of people, a corporation, a government entity, or any other organization.

An institutional sector is a group of institutional units that have similar economic characteristics and are engaged in similar types of economic activities. The sector classification is important for understanding the economic structure of a country or region.

There are several types of institutional units, including:

1. Households: Individual households or groups of people living together that consume goods and services and own assets.
2. Non-profit institutions serving households (NPISH): Organizations that provide goods or services to households without making a profit, such as charities, religious organizations, or non-governmental organizations.
3. Financial corporations: Institutions involved in financial intermediation, such as banks, insurance companies, or investment funds.
4. Non-financial corporations: Corporations involved in the production of goods and services for sale on the market.
5. Government: Government entities at different levels, such as central government, regional or local governments, or public administration bodies.
6. Rest of the world: Non-resident units, including individuals, businesses, and government entities of other countries.

These institutional units form different institutional sectors, such as the household sector, the financial sector, the non-financial corporate sector, the government sector, and the rest of the world sector.