ECON 110 Chapter Notes - Chapter 19: Canadian Dollar, Weighted Arithmetic Mean, Nominal Interest Rate

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Macroeconomics is the study of the behaviour and performance of the economy as a whole. It is concerned with the behaviour of economic aggregates and averages. A full understanding of macroeconomics requires understanding the nature of short-run fluctuations as well as the nature of long-run economic growth. Outcome and income: national product or output (cid:373)easure of a (cid:374)atio(cid:374)"s overall level of economic activity is the value of its total production of goods and services. One of the most important ideas in economics is that the production of goods and services generates income: the value of national product is by definition equal to the value of national income. To measure, we add up the values of the many different goods and services produced. Nominal national income: total national income measured in current dollars. Real national income: it is to determine the extent to which any changes are due to quantities or to prices.

Related Questions

What is the market for factors of production?

What is the market for factors of production?
1. The market for factors of production is where households and firms interact to trade factors of production for factor payments. For example this is where people provide firms with labor and firms pay them with wages.
What is the money market?
1. The money market is where households, firms, and the government may save and/or invest their money to earn interests. Money market includes banks, stock market, bonds market, and other financial institutions where economic actors can buy and sell financial assets to earn interests and/or dividends.
Who are the three economic actors in the circular flow model?
1. In a circular flow model, the three main economic actors are the households, firms, and the government. Households include the typical individual consumers. Firms include businesses and similar producers in the economy. Finally, the government refers to the whole government system from federal to local level.
How is the national income of an economy determined?
1. The national income of an economy is determined by measuring the total value of the output produced in an economy or the total income earned by the actors in the economy. In a circular flow model, we can see that the value of total output produced should equal the total value of income generated and earned in the economy. This is because every dollar spent by someone in the economy is received by another person in the economy as income.
What is GDP?
1. The gross domestic product or GDP represents the sum total of the value of the final goods and services produced within the economy for a given year. It is the most commonly used measure of its economy’s productivity and income.

1.
What is an accounting identity?
A. It is a statement that by definition must be true
B. It is an equality that must be true regardless of the value of its variables.
C. It is a technique accountants employ in the preparation of income statements.
D. All of the above.
E. A and B only.

The account identity that is used to estimate the gross domestic product of a country is given by
A. Income = Production - Comsumption
B. Consumption = Income - Saving
C. Production = Expenditrue = Consumption
D. Production = Expenditure = income

2.
What important factors do GDP estimates leave out? (check all that apply)
A. Leisure
B. The value of intermediate goods.
C. Home production.
D. The production of illegal professions.
E. Capital depreciation.

3.
Which of the following news stroies (all published in early 2014) would typically be studied in macroeconomics? (Select all that apply)
A. "5 Reasons Why Apple is Looking Like the Next Sony"
B. "Expectations High for March Employment"
C. "We Believe Inflation Should Rule Monetary Policy."
D. "Which College-and Which Major-Will Make You Richest"
E. "What If Economic Growth Is No Longer Possible?"

4.
Why is it essential to differentiate between real and nominal growth rates of GDP?
A. The nominal growth rate is more informative than the real growth rate since it is broader in the sense that it captures both price and output changes.
B. The nominal growth rate combines the effect of price changes along with changes in the production of goods and services and thus gives a less clear indication of the impact on living standards
C. It is the real growth rate that is meaningful since it indicates the change in the production of goods and services, a very significant source of improved living standards.
D. All of the above.
E. B and C only.

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ECON 110 Chapter Notes - Chapter 19: Canadian Dollar, Weighted Arithmetic Mean, Nominal Interest Rate

ECON 110 Full Course Notes

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