MGEB06H3 Lecture 2: Week 1 – Chapter 2 Notes
19 Feb 2019
School
Department
Course
Professor
Document Summary
Variations in output (y) if applicable lead to changes in employment (l) & vice versa: long run (lr)- equilibrium about 4 or 5 years (later, the average price level is perfectly flexible. At the same time, it is a short enough period of time: the productive technology is still fixed, the capital stock also continue to be fixed. Variations in the amount of input (k&l) and technology lead to change in output. Inflation rate- consumer price index (cpi), deflators- from the nia: output means gdp (main indicator, unemployment rate- and labour market detail, exchange rates- real and nominal, balance of payments- current account, government balances- deficits/ surpluses. Income and expenditure quantities are the same because every transaction has a buyer and a seller: three types of non-market output not counted: (most) do-it-yourself home production ex. Y= c + i + g + nx. Inflation rate- is estimated by the percentage rate of change of price index.
