ECO349H5 Lecture Notes - Lecture 5: Gdp Deflator, Real Interest Rate, Potential Output

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15 May 2017
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Lf + non-lf = p (non-lf: under age 14 or disabled) Unemployment types: frictional: , , cyclical real output different from potential output. Or all available labor resources are being used in the most economically efficient way. We can also say even in the full employment, some unemployment exists because of the frictional unemployment and/or structural unemployment. Real gdp calculation: p(base yr)*qi base year. Money gdp or gdp = deflator * real gdp. 2014: gdp in 2013, deflator in 2014, growth rate of gdp, growth rate of real gdp. Real interest rate = interest rate - inflation. If add up all final goods double count problem overestimate. Final product of company a is input of company b. Only consider revenue-cost of inputs, not consider salaries. A food processing company"s revenue in 2014 is 5000, cost of sugar is 100, cost of potatoes is 500, cost of administrators" wage is 1000, the value added is : total expenditure approach.

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