ECO-4 Lecture Notes - Lecture 18: Money Supply, Government Spending, Fiscal Policy
Document Summary
Flexible exchange rates offer an effective international monetary arrangement (58 agree) Fiscal policy has a significant simulative impact on a less than fully developed economy (47 agree) The money supply is more important target than interest rates for monetary policy. In the short run, unemployment can be reduced by increasing the rate of inflation. Close to one quarter of total production flows from public sector activities. Gdp: standard measure of the economy"s output. Government spending accounts for about 22 % of gdp. China- not really an open economy, export sector is small portion of total economy. 16. 5 million cad held jobs in 2006. Majority of workers produce services, not goods. Avg hourly wage of over plus benefits. Payments to capital account for the remainder of national income. Owners of capital receive profit and interest. Profit accounts for about 7 percent of the price of a typical product. Consumption: consumer spending on goods and services (accounts for 60% of gdp)
