ECO 1302 Lecture Notes - Lecture 36: John Maynard Keynes, Business Cycle
26 Dec 2017
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Document Summary
Real gdp is calculated by valuing outputs of different years at common prices. Therefore, real gdp is a far better measure than nominal gdp of changes in total output. Only goods and services produced within the year. Only production within the geographic boundaries of canada. Limitations of the gdp: what gdp is not. Does not deduct ecological costs of economic activity. Canada has seen significant fluctuations in economic growth, unemployment, and inflation. Before wwii, the business cycle was particularly strong, the worst episode being the great depression of the 1930s. Figure 5: the growth rate of canadian real gdp, since 1871. Figure 6: the inflation rate in canada, since 1868. A worldwide event most severe decline in economic activity. Caused a much-needed revolution in economic thinking. Until the 1930s, the prevailing economic theory held that a capitalist economy could cure recessions or inflations by itself.
