BUS 100 Chapter Notes - Chapter 2: Gross Domestic Product, Purchasing Power Parity, Global Recession

• School: UFV
• Department: Business Administration
• Course: BUS 100
• Professor: Kim Milnes

Document Summary

Aggregate output = total goods/services produced by system in a period. If aggregate output grows more than pop. , the per capita goes up. This causes higher standard of living (total quantity of goods/services that citizens can purchase: business cycle = regular growth/contraction. Standard cycle: peak recession trough recovery. Recession considered two consecutive quarters where economy shrinks. Depression occurs when the trough lasts 2+ years: gross domestic product (gdp) & gross national product (gnp) Gdp = total value of all goods/services produces by domestic factors. Replaced gnp, where all cnd. ownership considered (1) cnd. owned company in brazil counts for gnp, but not gdp (2) french company in canada counts for gdp, but not for gnp. Gdp is key factor in growth, but not exclusive (debt another factor) Real growth rate is gdp adjusted for inflation/currency changes. Real gdp means that gdp has been adjusted for above factors (1) when not adjusted, called nominal gdp (in current $)