ECO102H1 Lecture Notes - International Monetary Fund, Indirect Tax, Gdp Deflator
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Microeconomics: focus on individual firms, households
Macroeconomics: focus on entire economy
International Monetary Fund (IMF)
January 2011 projections of real GDP (measure of output)
CountryReal GDP Growth
2008 2009 2010 2011
canada 0.4-2.6 2.6 3.6
U.S.0.4-2.5 2.7 2.4
China9.6 8.7 10.0 9.7
Russia5.6-9.0 3.6 3.4
World3.0-0.8 3.9 4.3
1.why the dramatic decline in 2009?
2.Why the improvement in 2010 and 2011?
3.In 2010 and 2011, will unemployment fall?
How do economists measure “output”?
GDP (Gross Domestic Product):
-The measure of output and of incomes earned to produce output
1.Total expenditures on output = total incomes earned to produce output
ii.Factore incomes approach
1.Formal definition of GDP: The Market Value of all final goods and
services produced within a country in a given period of time, usually a
2.Total Expenditures = Total incomes earned
i.Example: John pays Joan $50 to mow his lawn.
Expenditure (by john) = $50
Income earned (by joan) = $50
ii. Implication: GDP can be measured either by adding
expenditures or by adding incomes earned
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