ECN 204 Lecture Notes - Keynesian Economics, Aggregate Demand, National Research Universal Reactor
Document Summary
Increase exports (have a positive balance in trade). It leads to debt most of the time, plus we pay interest. If net exports > 0, then exports > imports. If net exports > 0, then imports > exports. Gdp: gross domestic product: gdp is the market value of all final goods and services produced in the economy within one year; it is always measured in monetary terms. Gdp is used for an international comparison of how we are doing, but it is not an adequate measure. 8 reasons are: barter transactions ignored, unpaid work ignored, underground transactions ignored, quality and composition of goods ignored, environmental costs ignored, gdp ignores population size, per capita gdp ignores distribution of income. leisure is ignored. Per capita gdp: gdp/population. better indicator of how the country is doing. Nominal gdp: current q x current p ex: gdp 2009 = q2009 x p2009. If nominal gdp increases that means, q or p have increased.