[ECON 1P92] - Final Exam Guide - Everything you need to know! (27 pages long)

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

Document Summary

Studies the overall economy or aggregate economy. The overall price level, not individual prices. Total production in the economy, not the production by individual firms. Adjustments to changes across the whole economy. Total output produced is the total value of all goods and services produced. Make things and sell them we produce an income, production of output generates income. Measured in dollars of total quantity of output. Money we have on us right now. If price level changes over time are removed only changes in production remain. What economy could produce if all resources were employed at their normal level of utilization. Output gap = the difference between the potential and actual output ( what we were are putting out in the economy). Denote potential output by y* and actual output by y: When actual income (output) is less than potential income. When actual income (output) exceeds potential income. Can never recover losses of past years.