ECO 1102 Lecture Notes - Lecture 2: Gdp Deflator

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ECO 1102 Full Course Notes
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ECO 1102 Full Course Notes
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Microeconomics: the study of how individuals and how irms make decisions and how they interact with one another in markets (one). Macroeconomics: the study of economy-wide phenomena, including inlaion, unemployment, and economic growth (many). Gdp: measures the total income of a naion; the most closely watched economic staisic because it is the best measure of a society"s economic well-being. Gdp is the market value of all inal goods and services produced within a country in a given period of ime. Gdp adds together many diferent kinds of products into a single measure of the value of economic acivity. Because market prices measure the amount people are willing to pay for diferent goods, they relect the value of those goods. If the price of an apple is twice the price of a banana, then an apple contributes twice as much to gdp as does a banana. It includes all items produced in the economy and sold legally in markets.

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