MGEA05H3 Lecture 2: Lecture 02
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Gdp measures the sum of all final goods and services produced within a country. Gnp measures the sum of all final goods and services produced by a country"s residents (all over the world). We use rgdp per capita to take out the effect of price changes on the value of production (avoids bias of a country with a larger population tending to have a higher. Rgdp per capita = rgdp/population ---> measures productivity. It measures how fast the cost of a basket of goods and services bought by a typical canadian household has changed over time. It measures the wholesale cost of a typical fixed basket of goods purchased by producers, items enter ippi include raw materials such as coal, steel, and other inputs such as electricity. It is a current weighted price index, i. e. , it uses the currently quantities of all goods and services that enter into gdp as weights.