EC140 Lecture Notes - Lecture 1: Output Gap, Potential Output, Business Cycle

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EC140 Full Course Notes
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What macroeconomics is all about chapter 19. Nominal valuables: nominal gdp includes price effect (price x income, want to keep prices constant to see the real growth and real costs. Questio(cid:374)s (cid:396)elati(cid:374)g to the idle(cid:374)ess of (cid:396)esou(cid:396)(cid:272)es a(cid:374)d the g(cid:396)o(cid:449)th of the e(cid:272)o(cid:374)o(cid:373)y"s p(cid:396)odu(cid:272)ti(cid:448)e capacity fall within the realm of macroeconomics. Definition: the study of the determination of economic aggregates such as the total output employment and growth. If positive number, it means we are exporting more if negative number it means we are spending more there is a leakage in economy. One of the most commonly used measures of national income is gpd (the value of goods and services produced in a country) Gdp can be measured in real or nominal terms. This gives nominal rational income, which is total national income measures in current dollars. Real nominal income is national income measured in constant based-period dollars it changes only when quantities change.

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