ECON 203 Lecture Notes - Lecture 5: Fisher Equation, Labour Force Survey, Nominal Interest Rate

• School: University of Calgary
• Department: Economics
• Course: ECON 203
• Professor: Peter Tracey

Document Summary

Not for grades, but if u do have it u can use it. Only look at final sale to consumer as the final gdp. Question 8-12 -> see table on practice test for data. Given the quantity and price for 2007 and 2017. What is 2017 nominal gdp = 11790 (real and nominal are the same in the base year). Nominal interest rate ( =i ) = ( real interest rate ( = r) ) + inflation rate (=pi) There fore i = r + pi or i pi = r. We are looking at an index number of interest rate bank rate set by bank of. Suppose you walk into a bank and asked for interest rate and they said. 10%, this is a nominal interest rate (almost always bank interest rates are nominal). However, economists are interest for real interest rates without the inflation. Buy computer @ pi = 6 .