Political Science 2211E Chapter Notes - Chapter 1: Potential Output, Business Cycle, Macroeconomics
4 Feb 2019
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Standard of living in canada is much higher - higher standard of quality of goods. Standard of living can be finding a good job, buying things. Since 1977, gov has collected more money in taxes than it has spent on social services. Financial managers: federal government and bank of canada. Modern macroeconomics did not emerge until great depression - high unemployment and stagnant production. Worst year: 1933 - lowest production and 20% unemployment. Uncertainty around market economy and private ownership. Keynes: depression and high unemployment = insufficient private spending. Gov must increase spending to solve problem. Economic growth: expansions of an economy"s production possibilities. Gdp: value of total production measured in prices of a single year. Use dollar prices to eliminate inflation and analyze true growth. Potential gdp: value of production when all the economy"s labour, land, capital, and entrepreneurial ability are fully employed. Fluctuates around real gdp and gdp growth. Real gdp fluctuates around potential gdp in business cycle.
