EC250 Lecture Notes - Lecture 2: Canadian Dollar, Legatum Prosperity Index, Gross National Happiness
Document Summary
Economic activity is measured to assess the current state of the economy and predict future economic developments. To measure economic activity, the national income and expenditure accounts were developed. Standard measure: gdp: gross not excluding value of capital used up during year, domestic produced in canada by anyone (canadian/foreigner, product measures production. Exclusions: household work services provided free of charge from one household to another, unrecorded activities illegal activities/unrecorded legal activities, effect on environment. Used for comparisons over time and across countries. The distinction between flows and stocks is important. Note: stocks and flows: flows variables measured per unit of time, ex. The value of output increased by 10% from the last year. Used when there is more than one good or when good"s quality changes over time. Multiple quantities by prices and add it to obtain value of production. Used for products without a market price. Imputed value is the cost of providing the service.
