Class Notes (839,313)
Canada (511,260)
Economics (472)
ECON 102 (134)
Henry Siu (1)


39 Pages

Course Code
ECON 102
Henry Siu

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1Jan 05 A Intro Social Sciencesstudies how people behaved and make decisions and what happens when people interact Methodology to study phenomenaFormal Sciences math phil Phy sciences BCP Applied Sciences Eng Med HumanitiesPhenomena of missing woman sex ratio of woman at birth economists tries to figure this outWhat is MacroGDP why it grows why it fluctuatesemployment and unemployment bank of Canada and its role in determining inflation and interest rates B Basic Macro ConceptsI What is GDPGross Domestic Product the market value of all final goods and service produced in a country in a given period of time GDPvalue addedincome earned in a country GDP produces IN a country IN a given time period eg 2011III quarter a measure of wellbeing or standard of living a measure of quantity how big the economy is how to measure using value measured by prices 2Market Valueone dollar apple two dollars orange sameof apples and oranges but oranges hv higher GDP ppl might be willing to buy two apples for one orange Market value by using market prices Final goods and services emphasis whos the final consumer GDP intermediate use not GDP flour bought by Tim Hortons to make donuts not GDPto avoid double counting Example 1Jim operates a farm produces red daisy and sells it to Pam in exchange of 10 Pam sells the daisy to Dwight for 10Dwight offer Jim for econ lesson Jim pays 10GDP20sum of final goods and services producedFinal goods and services Econ lesson 10 Pam sells daisy to Dwight 10 Jim to PAM not counted as GDPExample 2 Jim sells flowers to Pam for 10 Pam sells to Dwight for 15 Dwight tutoring Jim for 10 GDP 25 final transaction for flowers Pam to Dwight for 15 and tutor lesson from Dwight to Jim for 10What does the extra 5 count at all Because what they selling is what they are willing to pay for Pam might be paying an extra services closer location 5what Dwight willing to pay for Pams services 33 Important points about GDP 1 GDP also measures all income earned in Canada in a given time period The actual buying transfersomebodys incomeExample 2 all income earnedJim 10Pam5 Dwight10GDP 25GDP is incomeJan 10Example 3 Jims flower farmhire Kelly to work for him he pays her 5Jim sells flower to Pams Flower Shop for 15Pam rent the retail place from Dwight for 5 Pam sells flower to Dwight for 30 Dwight provides econ tutoring to Jim for 10 GDP production 30flower 5rent 10 tutor 5wage WRONGRent and wage are not counted in GDP they are just input in order to produce flowers not final good or services GDP production301040GDP income Jim10 155 Kelly 5 Pam 1030155 Dwight 15 o GDP income40 Tax also counts towards GDPGovernment income2 There are some final goods and services not included in GDP because they are hard to measure dont have market value attached to them underground volunteerhome production Exception value of housing services Flower of services provided by owneroccupied houses
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