EC140 Lecture Notes - Lecture 6: Consumption Function, Eurocopter Ec120 Colibri, Real Interest Rate
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EC140 Full Course Notes
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Ec 120- lecture 6: chapter 22; working with the macro model, part 2. Three equivalent concepts: expenditure on output produced this year (or month/ quarter, production of output this year. Nominal gross domestic product- value of current output calculated at current prices. Real gross domestic product- value of current output calculated at base year prices. Outcome variables relating to the business cycle: potential gdp and the output gap, unemployment/ employment rates. Interest rates (real interest rate vs. nominal interest rate) Monday january 22nd 2018: exchange rates (price of foreign currency in canadian dollars) Total value of goods and services produced. Value added method avoids double counting of intermediate goods. By definition: expenditure = production = income. Consumption: durable, semi- durable, non-durable, services. Payments to factors (wages, salaries, interest, business profits) Indirect taxes paid to government net of subsidies paid by government. Defines total planned spending in the economy at any level of income. Consumption function: autonomous and induced expenditure.
