ECON 219 Lecture Notes - Nominal Interest Rate, Potential Output, Output Gap
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ECON 219 Full Course Notes
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Real gdp: growing at about 3%/year (q is growing) Gdp measures the value of market based transactions but not things like clean air, clean water, forests, getting along with coworkers/boss, Recessionary gap: not everyone fully employed (not where we are now). Currently we are about 1% below potential output. It is an estimate based on certain assumptions resulting in slightly different estimates. Labour force: #people employed and #people looking for a job. Unemployment will never be 0 (people leave labour force) In a recession, it"s not that every one takes a 3% cut in income, for example, but 95% don"t take any cut and the other 5% take the rest. Productivity: the use of this word is not enjoyed. Measure of output (gdp) per unit of input. Productivity: gdp per work effort (work effort can be per worker or per hour worked) Price level: a measure of the average price of things in the economy.