GMS 724 Lecture Notes - Lecture 2: Purchasing Power Parity, Income Distribution, Reflation
19 Sep 2016
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Ex: acer and sony netbooks made in taiwan: Both, ( because both are made in taiwan) Just sony ( sony is owned by japan) A country has large gnp means, ( gov"t tax them to bring back production) Improving power of gnp: per capita conversion, rate of change, purchasing power parity ppp , degree of human development, green measures. Other features of an economy (macro economic indicators: inflation prices go up, money worth less. Cost of high inflation: purchasing is expensive, demand decreases: unemployment. High unemployment loss of job, people don"t have money to buy, gov"t incentive to work, economy is not growing: debt look at debt to find indicators, income distribution, poverty, labor costs, productivity, balance of payments. Inflation: cost of living, implications of chronic inflation, price indexes & measurement problems, deflation -> reflation, ve inters rate no activity no money circulation.
