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MGTA01H3 (583)
Chapter 2

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Department
Management (MGT)
Course
MGTA01H3
Professor
Chris Bovaird
Semester
Fall

Description
Management Lecture 3 Chapter 2  Purpose of an economic system - Invest and create profits for businesses - Produce things people want - So everyone will be better off - Is Canada making things people want?  Gross Domestic Product (GDP) - Gross means big/large - One big simple number - Domestic means “at home” “within borders” - Product is stuff that gets made - All together it’s the number (value) of all the goods and services made in a country in one year - Calculate all the stuff produced and how much profit was made – GDP  Larger GDP - More workers, using more resources are producing more things of value - Biggest economy: US, China, Japan, Germany, France, UK, Brazil, Italy, India, Canada - America imports more than exports but population is really big so they sell and make lots of profit - GDP tells whether an economy is big - Doesn’t tell if it’s well managed, if it’s growing or if it’s equally distributed - Reasons why Africa barely exits because they don’t have the education or resources  GDP growth - Goal is to improve the GDP o Growing GDP  More people making more stuff o Falling GDP  Fewer people making less stuff  Called “recession”  US GDP growth - Grew then stopped - Banks started to fail and didn’t lend money, and business weren’t able to maintain the capital so the GDP shrunk  Double-Dip Recession - 2008 – U.S went into recession - 2010 – came back and gave everyone jobs “stimulus money” - 2008-2009 – Canada gave jobs to many to build the instructional centre - After that stimulus money is used up, it dips back into recession  Long Term GDP growth - Canada: 1-4% - US, UK, Germany, France: 1-4% - China and India: 8-10% - China might get as big as US sometime in the next 10 years Management Lecture 4 - Concern that France, Spain, and Portugal might go into recession - United Kingdom apparently is already in recession - China will not go into recession because it has had incredible growth within the economy  Growing GDP - Measure of whether an economy is doing well - Small/poor countries have the greatest capacity for growth because they start with a low base - Azerbaijan/Angola/Qatar all are oil-based country, and have the largest growing rate, because many countries have a high need for oil  GDP per Capita - Per capita = per person - GDP = everything that gets made in an economy - GDP doesn’t tell you whether the country is wealthy or if it includes wealthy people - GDP per capita – take the GDP and divide by the population of the country - GDP per capita – relative wealth of all people (approximately) - Canada GDP = 1.5 trillion / 33.3 million = 50,000 per capita - Countries with the largest GDP per capita = over 30,000$ - Middle income economies = 6-12,000$ (central America) - Low income economies = less than 5,000$ (Pakistan, Bangladesh) - Country with the largest GDP per capita – Luxembourg/Norway - Luxembourg  Has a small population so gives a lower denominator  Have a large number of clever people who do high value stuff  Half o
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