ECON 1P92 Lecture Notes - Unemployment, Potential Output, Ice Wine

• School: Brock University
• Department: Economics
• Course: ECON 1P92
• Professor: Marilyn Cottrell

Document Summary

Macroeconomics: studies the overall or aggregate economy, the overall price level, not individual prices, total production in the economy, not the production by individual firms, adjusts to changes across the whole economy. Gross domestic product gdp total output produced is the total value of all goods and services produced: production of output generates income, the quantity of total output is measured in dollars. Nominal national income (current dollar: the dollar value of total output. Real gdp: measures income at base period prices. If price level changes over time are removed, only changes in production remain. Changes in real gdp: measures changes in production. Same as the potential national income (output: what the economy could produce if all resources were employed at their normal levels of utilization, often called full employment income. Output gap the difference between potential and actual output. Recessionary gap when actual income (output) is less than potential income. Inflationary gap when actual income (output) exceeds potential income.