Chapter 2

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Published on 24 Feb 2011
School
UTSC
Department
Management (MGT)
Course
MGTA01H3
Professor
Introduction to Management Chapter 2 notes
Purpose of an Economic system is to assemble/organize resources; make things people want;
and to create profits for businesses.
Gross Domestic Product (GDP) is the value of all goods and services produced in a
country in one year.
The larger the GDP the more workers using more resources and producing more things
Gross National Product (GNP) is the value of all goods and services produced by a
firm in that country (ex. Canadian Businesses manufacturing in China) in a country no
matter the location of the production.
Countries with the Largest GDP respectfully; The United States of America, China, Japan,
India, Germany; 14 - Canada
Growing GDP: More people making more stuff
Falling GDP: fewer people making less stuff
Falling GDP is also called a recession. A recession occurs when a countrys GDP falls for
two consecutive terms.
GDP Per Capita
Per capita means per person
GDP = total size of an economy
GDP per Capita = relative wealth
Some countries are richer than others because they possess more and relatively cheaper
natural resources; they have more money and better technology; they have better trained
and educated workers.
Productivity
Productivity is what separates countries economies. Productivity gives countries the ability
to make things quickly and efficiently. Is the ratio of inputs (time and money) and outputs
(products/services). How many man-hours, how much money or natural resources does it
take to make stuff? Productivity allows us to produce things quickly and efficiently
US GDP = 12X Canadas
US population = 10X Canadas
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Document Summary

Purpose of an economic system is to assemble/organize resources; make things people want; and to create profits for businesses. Gross domestic product (gdp) is the value of all goods and services produced in a country in one year. The larger the gdp the more workers using more resources and producing more things . Gross national product (gnp) is the value of all goods and services produced by a firm in that country (ex. Canadian businesses manufacturing in china) in a country no matter the location of the production. Countries with the largest gdp respectfully; the united states of america, china, japan, A recession occurs when a country"s gdp falls for two consecutive terms. Some countries are richer than others because they possess more and relatively cheaper natural resources; they have more money and better technology; they have better trained and educated workers. Productivity gives countries the ability to make things quickly and efficiently.