ECON 1BB3 Lecture Notes - Lecture 3: Gdp Deflator, Labatt Brewing Company, Walmart Canada

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Econ 1bb3: macroeconomics lecture 3: measuring a nation"s income cont. and test 1. Payment of interest and dividends for the ownership of capital. Gnp = gdp - net investment income paid to foreigners. Foreign owned companies among canada"s current largest companies: Price and quantity data for a hypothetical economy. First find nominal gdp for year 1 and year 2. From the previous example nominal gdp is higher in year 2 than it was in year 1: However it is hard to determine if nominal gdp rose because: To obtain a measure of the amount produced that is not affected by changes in prices we use (real) gdp. Real gdp is the production of goods and services valued at (constant) prices. Now let"s find real gdp for year 1: To calculate real gdp for year 1 multiply. Now let"s find real gdp for year 2: Again, assume year 1 is the base year. To calculate real gdp for year 2 multiply.