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Final

ECO105Y1 Final: Revision Notes- Winter


Department
Economics
Course Code
ECO105Y1
Professor
Avi Cohen
Study Guide
Final

This preview shows pages 1-3. to view the full 14 pages of the document.
Macroeconomics for Life
5. Are you Smart Choices Smart for all?
Macroeconomics and Microeconomics
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6. Up around the Circular Flow
GDP, Economic Growth, and Business Cycles
Differentiate nominal GDP, real GDP, and real GDP per person, and demonstrate how each relates
to living standards.
The dictionary definition of ‘gross’ is ‘total, aggregate, overall, or combined’
Value is the worth, in CAD, of all products and services produced.
We can reduce the huge, macro-size addition problem to a single line by using abbreviations. The
superscript letters A, B, C,…Z represent the different products and services. For each product or service,
P stands for its price, and Q stands for its quantity.
A final product or service is consumed directly by consumers.
Nominal GDP for any year counts only the products and services produced in that year.
A flow provides estimates for each quarter (three months) of a year’s economic activity. These quarterly
estimates are then added together at the end of the year to measure nominal GDP for that year.
For measuring the macroeconomic performance outcome of steady growth in living standards, real GDP
provides much more useful information than nominal GDP.
Real GDP per person is the best measure of a country’s ability to meet the material needs of its citizens.
Nominal GDP is equal to real GDP in the year used as a standard for constant prices.
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