EC140 Lecture Notes - Lecture 1: Canadian Dollar, Capital Account, Real Interest Rate
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EC140 Full Course Notes
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Value of naional product is equal to value of naional income. To measure total output in dollars add up values of many goods produced: gives nominal naional income (current dollar, with base-period prices, get real naional income (constant dollar) Real gdp luctuates around a rising trend: trend shows economic growth in the long-run, short-run shows luctuaions business cycle. Potenial output is what the economy could produce if all resources were employed at their normal levels of uilizaion: oten called full-employment output. Output gap measures the diference between potenial output and actual output: output gap = y y, when y < y* recessionary gap, when y > y* inlaionary gap. Unemployed are people 15 and over that are acively looking for jobs. Percentage of the labour force that is unemployed: (number of people unemployed / labour force) x 100. Unemployment that arises from normal labour market turnover. Creaion and destrucion of jobs requires that unemployed workers search for new jobs.