ECON 1BB3 Chapter Notes - Chapter 5: Demand Curve, Stock Market Crash, Invisible Hand

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Gdp (gross domestic product): the measures the market value of all final g&s produced in. Flow variable: an amount measured over an interval of time. Ex. average spending per week, wages, inflation. Stock variable: an amount measured at a specific point in time. Ex. amount of money in your savings account, unemployment, wealth. Mercantilism: the incorrect theory that a nation"s economic objective should be to accumulate precious metals in the public treasury; this prompted trade barriers to cut imports, but trading partners retaliated, reducing trade and the gains from specialization. Expansion: when the economy is growing in terms of rising output, employment, income & other aggregate measures. Contraction: economy is declining, decrease in output, employment, income & etc. Begins after the previous expansion has reached a peak. Then continues until the economy reaches a trough. Recession: a milder contraction, decline in the economy that lasts more than a few months. In early stages, businesses slow down, orders for machinery slip