Thursday, October 27, 2011
Chapter 2-lecture 3 chapter 2
-purpose of any economic system rather its market like canada or command like cuba; produce the
things that people wants, to gather around all the factors of production to produce what they.
-make the stuff that people want; like food to eat, clothes and houses
-GDP; domestic-within our home without our product (area)
-product; the stuff that gets turned out.
-USA on top then China
-GDP; merely tells us about our size; one data points
-to ask ourself how the economy is doing then we should find out if its producing more stuff is it turning
out more ipod, pizza etc. GDP growth
-Gdp growth; gdp is bigger then 2010 then 2007 then we have to assume more factories are hiring,
more people are buying more stuff.
-the big rich countires; UK, france; are fairly high so if your starting from a high point then ur rate of
growth is most likely not to be increasing as dramatically
-western countries are growing in 1,2,4% that tends to be the norm
-some of the merging giants; Brazil, India and China
-starting from lower base are growing; 6.7,8,9, china (10)
-how do we know canada and usa are rich; GDP divided by the population GDP per capita
-luxerberiger and norway are rich; very productive people, high educated people.
-productivity; was a ratio what is the value of stuff that gets turned out by the people living in the
-richest countries have the most educated people that have access to the fanciest technology.
-technology goes into improve transportation and communications
-one of reason we have engineer etcs
-we have lots of lots of natural resoruces; canada
-one way to find out if a country is rich is to see if its using all of its factors of productions
That are available to it.
-productivty/purpose of an economy; is to use all of its factors of productions
-an important measure. GDP, GDP per capital are all measure of showing how well a country is doing.
-purpose of any economy is to give people something meaningful to do.
-population of canada is around 34 million; not people are working or looking for work
-labour force; number of people, people that want to work. Is around 16-18 million
-labour force around half population; the other half is retired, jail or going to school fulltime
-the unemployed is the percentage of the labour force (16-18 million) that could be working,should be
and are activately looking for work. -activately seeking it
-unemployment rate in canada is around 7-10%; around 8%
-USA unemployment rate is lower then ours around 6%
-historically and traditionally why is a smaller number of usa unemployed? Maybe our economy
-since 2007; unemployment ins USA is 9.1%
-some people say that the unemployment rate might be more then 9.1% they say the discouraged
worker effect and underemployment
-"discouraged" worker effect
-underemployment; people that have a job, arent using their full skills and full capacity.
-person had MS and working as a walmart greeter; isnt using their full skills. Can be used for high
-another example of underemployment is that you are working at what your good at but your only
working part time. ; you have MS but your only working contract 3-4 months a year and other few
months your talent arent being used. The economy is not turning out as much productivity as it should
-discouraged worker effect; people are looking for a job, and looking for a job are finally like to hell with
it and go travel or go to school. Go back and get another degree. Give up hope of getting a job.
-inflation important thing to figure out if the economy doing what it should. Is it on the right track.
-inflation; when the prices of goods are going up. But the products themselves arent any better there is
no change in the quality or quantity of the product.
-prices go up one of 2 reasons.
-prices go up because of supply and demand; which seems to suggest that there is an insufficent
number of red bikes being made; the market is misallocating resources their arent enough factors of red
bikes starting up.
-or the government policy is punishing people that want to get into the red bicycle business but chose
not to; prices of bikes goes up
-another reason for inflation is; the government prints too much money.
-the governement prints more and more pieces of paper.
-and as a result; the real value of each dollar and 2 dollar because of the excessive