Three-Sector Economic Balance: Households, Companies, and Government

Abstract

Economic equilibrium in a three-sector context includes the relationship between the household sector, the corporate sector, and the government sector. This article reviews the three-sector economic equilibrium with a focus on the flow of income and the conditions needed to achieve it, the types of taxes, and the impact of taxes on people's consumption and savings. The approach used in this article is a qualitative method with a descriptive type of analysis based on existing literature. The results of the discussion show that the economic equilibrium achieved will affect income distribution and overall economic stability. The types of taxes imposed vary, with a significant impact on individual consumption and savings patterns. Taxes affect people's purchasing power and other economic decisions, thus having direct implications for the macroeconomy. This article suggests that tax policy should be tailored to the objectives of the economy to ensure optimal equilibrium.