ECON 1BB3 Lecture 4: Module Two -Fundamentals of MacroEconomics

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Gross domestic product: market value of all final goods & services produced in a country in a given period of a time, measure of how much stuff we make, three ways to calculate gdp. Basic prices do not include sales tax, markets prices do. Expenditure (market prices) same concept, different prices. Market price is how much i pay for a shirt at walmart . 25. Basic price is how much walmart keeps as profit . 00. The . 25 is the sales tax that government collects. Output and expenditure method: add together all items produced in canada, using basic (market) prices, based who purchases them, formula. Y = c + i + g + (x-im) C= consumption: all purchases made by households, three categories. Expected to last nearly an year but not as long as your fridge. I= investment: spending by firms, three categories. Lasts much longer than any goods we consider durable.