ECO101H1 Chapter Notes - Chapter 8: Potential Output, Inventory Investment, Fixed Investment
98
ECO101H1 Full Course Notes
Verified Note
98 documents
Document Summary
Studies entire country: whole is greater than sum of parts. One response leads to amplified response by another. What to do when potential gdp > actual. Slumps caused by inadequate spending: recession (contraction), expansion (recovery, peak, trough of business cycles, keynesian economics. Ability of government to pay for health, education, services depends on long run growth: overall level of prices determined by money supply. Gdp: market value of final goods/services produced in a country during given period. Price gives value, enables adding of different types of goods. Public goods valued based on cost of provision instead of price. Flow of factor income from firms to households. Realtor provides new service: national income and product accounts keep track of flow of money between different sectors. Consumer spending, sales of producers, business investment, government purchases. Goods, services bought by consumers except newly constructed housing. Goods (primarily capital goods) bought by firms to increase future production.
