ECON 1P92 Lecture Notes - Gdp Deflator, Canadian Dollar, Black Market

• School: Brock University
• Department: Economics
• Course: ECON 1P92
• Professor: Professor Cottrel

Document Summary

Cpi and gdp deflator move together: same inflationary forces affect both of them. Gdp deflator tracks prices of all g & s produced in canada. E. g. world price of coffee rises, pushes up cpi. Canada produces no coffee, so no effect on canadian gdp deflator. Gdp does not measure economic activity outside of regular and legal market: illegal activities (drugs, prostitution, etc. , the underground economy (tax-avoided transactions, home production (housework, diy projects, economic bads" (pollution) Or are they just an offset to the bad (criminals) Gdp does not measure all aspects of human welfare. Real gdp increased over the past century 2 main causes: an increase in inputs land, labor, and capital used in production, an increase in the amount of output produced per unit of output. Per capita output is output per person (gdp/population) measures the average output or income per person. Per capita output is a good measure of changes in average standard of living.