ECON 203 Lecture Notes - Lecture 8: Gdp Deflator, Aggregate Supply, Money Creation
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12 Mar 2018
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ECON 203 Full Course Notes
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Econ 203: one core challenge of macroeconomics is to understand how fiscal policies and monetary policies are used to correct recessions and booms conditions. Doing so allows us to correct undesirable phases of the business cycle and aspire to achieve macroeconomic goals: such as enjoying real growth with low or no inflation along with low or no unemployment. Thus in studying macroeconomics we need to address the following: Who applies them: understand what is meant by gdp. Both nominal and real. (understand the concept of nominal and real as it applies to wages, interest rates, and prices. ) Price indexes such as the gdp deflator and consumer price index. Expenditure approach to measuring gdp: aggregate spending (c+i+g+nx). Understand each component, such as c (consumption), i (investment), g (government purchases), nx (net exports: exports imports) Recognize the importance of s = i (savings = investment: money and money supply, definitions of money (m1+)