Class Notes (836,581)
Canada (509,857)
ECON 335 (6)
Lecture

Econ 335 Flath Chp1

3 Pages
152 Views
Unlock Document

Department
Economics (Arts)
Course
ECON 335
Professor
John C Kurien
Semester
Winter

Description
Chapter 1: Incomes and Welfare of Japanese Today GDP and National Income GDP (gross domestic product): -value of current market price -all final goods and services -produced by the nation -in a given year →within geographic borders GNP (gross national product): -value of current market price -all final goods and services -produced by the citizens of the country (whether or not resident within borders) -in a given year ⇒final goods and services used to avoid double counting NI (National Income): -income of all residents → GDP – (depreciation expenses + indirect tax) = NI - GDP and NI highly correlated Spending is either for consumption, investment or accumulation of foreign wealth - NI = either consumption, investment purchasing of foreign assets - Spending by business = Investment - Spending by households = Consumption - Government purchase of final goods = Investment/consumption - Japanese national account  Investment = public works eg. Purchase of buildings, roads  Consumption = National defense and compensation  National government is prevented by law from issuing bonds in excess of that needed to finance investment Investment contributes to sustainable consumption - Higher NI devoted to investment = sustain higher steady state levels of consumption - High saving rate + high investment rate = higher sustainable consumption level Consumption Level and NI - Y(National Income) = C(spending by household) + I(spending by businesses and household spending for housing) + G(government expenditure) + [X(exports) – M(imports)] - GDP = C + I + (X – M) - Purchasing Power Parity (PPP) → how much money would be needed to purchase the same good and services in 2 different countries: used to calculate exchange rate  Price of each good will be the same in all countries that trade freely with one another when exchange rates are converted  Divergence of PPP: always associated with barriers to trade (result of government interference)  Consumption activities that use land tend to have higher relatives prices within Japan → difficulty in international trade (weakness = anything to do with land) Real Income
More Less

Related notes for ECON 335

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit