RSM100Y1 Midterm: MIDTERM REVIEW Part 2
Document Summary
Statements examining- made by economist to describe how the current cycle developed. Boxes - used to understand the factors behind the statements. *statement 1 slowdown : below-trend (economic growth below the potential), the rate of growth counts as slowdown (unemployment will rise) Recession : usually the situation where there are 2 or more consecutive quarters; negative growth. *statement 2 sources of slowdown : resources of the slowdowns in us and canada are different. Us: slowdown centered in residential investment and inventories. Canada: is centered in net exports-with inventories soon to come. Details of gdp: consumption, government, investment, exports, imports, changes in inventories. Summary: y(gdp) = c + i + g + x m + invtry. Us: weakness in gdp is residential investment; net exports = positive. Canada: weakness in gdp is net exports, res investment has been weak recently but not has not reduced gdp seriously, inventories are not a big negative, but might be in future.
