ECON 1P92 Lecture Notes - Lecture 1: Unemployment, Potential Output, Gross Domestic Product

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1 Oct 2016
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ECON 1P92 Full Course Notes
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ECON 1P92 Full Course Notes
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The overall price level, not individual prices. Total production in the economy, not the production by individual firms. Adjusts to changes across the whole economy. Total output produced is the total value of all goods and services produced. The quantity of total output is measured in dollars. If price level changes over time are removed, only changes in production remain. Same as the potential national income (output) levels of utilization. What the economy could produce if all resources were employed at their normal. Output gap - the difference between potential and actual output. Recessionary gap - when actual income (output) is less than potential income. Inflationary gap - when actual income (output) exceeds potential income. They are gone with the passage of time. Growth in potential gdp can increase future incomes. Increase in average income doesn"t mean an increase for all. Employment - the number of adults (a5 and over) who hold jobs.

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