ECN 204 Chapter 4: ECN 204 Chapter 4 Notes.docx
Document Summary
Assessing the health of the economy: performance and policy. Nominal gdp: totally the dollar value of all goods and services produced within the borders of a given country using the countries current prices during the year that the goods and services were produced. Inflation: is an increase in the overall level of prices. In order to have economic growth an economy must devote some fraction of its current output to increasing future output: savings: are generated when current consumption is less than current output. Investment: occurs when resources are devoted to increasing future output. Ex: building research facilities to build new fuel efficient cars. Financial investment: purchasing financial assets (stocks, bonds, mutual funds) or real assets (houses, land, factories), or buildings such assets , in the expectation of financial gain. Economic investments: has to do with the creation and expansion of business enterprises.
