Economics 1022A/B Lecture Notes - Lecture 1: Substitute Good, Currency Union, Aggregate Supply

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Bruce Hammond

Document Summary

Real gdp: gdp expressed in dollars from a given year (2007 is the current base year, eliminates effects of inflation. Calculate real gdp for 2007 and 2008 for an economy that produces the following: Pizza: , 295 q: keep prices the same as the base year for real gdp. If prices are adjusted for inflation, it is real. If prices are not adjusted, it is nominal: chain weighted index, uses the prices of 2 adjacent years to calculate real gdp growth, 1. Calculate the value of recent year"s production and prior year"s production at prior year"s prices: 2. Calculate the % change in value: 3. Calculate the value of recent year"s production and prior year"s production at recent year"s prices: 4. Calculate the % change in value: 5. Interest for capital: wages for labour, rent for land, profits for entrepreneurships. Inflationary gap: likely to see inflation, when equilibrium exceeds the las. Add up autonomous expenditure include consumption expenditure.