ECON 209 Lecture Notes - Lecture 4: Takers, Weighted Arithmetic Mean, Real Interest Rate

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maroonyak232

22 Jan 2016

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C. in ation: rate at which the price level is changing some base year the amount of goods and services consumed by a family in the base year. In ation and price level: price level: average level of all prices in the economy. 2: the cpi is based on the price of a topical consumption basket relative to the price in. 4: construction of the cpi, slides on my courses. E. a: anticipated in ation has less of affect unanticipated: unanticipated hurts you. Nominal interest rate: the rate expressed in money terms. Interest rates and credit flows: most institutions need credit: some need only short-term credit but may need both short- term and long-term, financial intermediaries like banks, link lenders, like car businesses and borrowers, citizens. Needs to be consistent on both ends: depreciation of canadian dollars means that it is worth less on the foreign- exchange rate market.

Related Questions

suppose that table shows economy's relationship between real output and the input needed to produce that output
a. what is productivity
b. what is per unit cost of production if the price of each unit is $2
c.assume that the price increases from $2-$3 with no change in productivity. What is new per unit cost of prod?In what direction would be $1 increase in input price push the economy's agg supply curve? what effect would shift of agg supply have on the price level and level of real output?
d. suppose that increase in input price does not occur but instead the productivity increases by 100 %. What would be new cost per unit of production?What effect would it have on agg supply curve?and the price level andreal output?

Input quantity Real GDP
150.0 $400
112.5 300
75.0 200

Use the following information to answer the next 2 questions: GDP per capita can be shown to equal average labor productivity times the proportion of the population that is employed (GDP/population= Y/L * L/population).

(a) The two factors that determine a nation's standard of living are: 1) the proportion of the population that works, and 2) its output per worker. The United States has an aging population and the proportion of the population that works is expected to decrease. Mexico has a relatively young population and, thus, the proportion of its population that works is expected to increase in the future. Given these circumstances, which of these two factors do you think is more relevant in each country for their standard of living? Explain your answer.

(b) Explain what happens with Econoland's total output (GDP) and its standard of living (as measured by GDP per capita) between 2014 and 2015, if we know the following information. The population of Econoland remains constant at 1,000 persons during both years. The number of employed workers increases from 400 in 2014 to 440 in 2015, but labor productivity, as measured by output per employed worker, decreases from $2,000 to $1,900 during the same time period. Show your derivations.

lemonlocust738

The greying of America will substantially increase the fraction of the population that is retired in the decades to come. To illustrate the implications for U.S. living standards, suppose that over the 53 years following 2013 the share of the population that is working returns to its 1960 level, while average labour productivity increases at the same rate as it did during 1960 -2013. Under this scenario, what would be the net change in real GDP per person between 2013 and 2066?

Instructions: Enter your response as whole numbers for dollar values and rounded to one decimal place for percentages.

Real GDP per person in 2013: $_______________

Real GDP per person in 2066: $__________________

Net change in real GDP per person between 2013 and 2066: $,_____________ which is an increase by_________________ % from 2013.

Year	Average labour productivity	Share of the population employed
1960	47,256	36.4%
2013	109,152	45.5%

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ECON 209 Lecture Notes - Lecture 4: Takers, Weighted Arithmetic Mean, Real Interest Rate

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