EC140 Chapter Notes - Chapter 26: Real Interest Rate, Potential Output, Production Function
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EC140 Full Course Notes
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Three variables in the canadian economy: real gdp. Measures economic acivity but does not represent material living standards: real per capita gdp, real gdp per employed worker. These three variables show diferent aspects of economic growth. Economic growth: sustained, long-run increases in the level of real gdp. Economists typically measure average material living standards with real per capita gdp. Addressing poverty and income inequality: not everyone beneits equally from economic growth, some not at all. Economic growth, which promises more goods and services tomorrow, is achieved by consuming fewer goods today: this sacriice of current consumpion is an important cost of growth. The process of economic growth renders some machines obsolete and also leaves the skills of some workers obsolete. Growth in the labour force: growth in populaion or increases in the fracion of the populaion that choose to paricipate in the labour force.