ECO100Y5 Lecture Notes - Lecture 10: Bread Machine, Pension, Net Income

• School: UTM
• Department: Economics
• Course: ECO100Y5
• Professor: Lee Bailey

Document Summary

Microeconomics: adam smith - prices, wages and interest rates coordinate activity automatically (the economy xes itself) Macroeconomics: john keynes - the short-run can persist for a very long time (the economy can"t x itself and needs govt intervention) System of macroeconomic accounting: the main concept is gdp (supply)=gde (demand)=gdi (income) - the economy has to balance. Net worth = assets - bonds so that assets=liabilities (for everything) Cash - assets for households and liability for nancial sector (mortgages opposite) 3. net worth of a country = value of non- nancial assets. Valuation matrix - in ates producers revenue to take taxes into consideration. Domestic supply at basic prices + taxes on them (value added) = Gfcf - gross fixed capital formation (gross means it includes depreciation) (fixed capital is like tables, machinery) (formation means we"re adding to xed capital) Gdp=gde, some of what we produced we didn"t spend on (-400 for the bread machine)