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Lecture 3

ECON 330D1 Lecture Notes - Lecture 3: Technological Change, Real Wages, Gdp Deflator


Department
Economics (Arts)
Course Code
ECON 330D1
Professor
Daniel Barczyk
Lecture
3

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TA: Byunguk Kang
Office Hours: M 1:30-3:30
byunguk.kang@mail.mcgill.ca
MIDTERM OCT 18 In Class
Core Inflation relies on a basket of goods and services that excludes food and energy
products
Producer Price Index- measures the price of a typical basket of a typical basket of
goods brought by firms
CPI vs. GDP deflator
Fixed Basket vs All goods
The GDP deflator includes only good produced domestically
The GDP deflator allows the basket of goods to change
Laspegres index: A price index with a fixed basket of goods
Paasche index….
With changing basket
Labor force: sum of employed and unemployed
Unemployed rate : number of unemployed/ Labor Force
Labor force participation rate: Labor Force/ Adult Participation
Some numbers
Canadian Labor force participation rate is 67 % of all the adults work in canada
(72% are males) and (62 % are females)
Questions:
1. What determines how much firms produce in the economy?
2. Who gets the income from production
Output Y depends on
1. Quantity of inputs (factors of production)
2. Ability of the economy to turn inputs into output (production function)
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