Jan 14, Introduction to Macroeconomics

Jan 14, Introduction to Macroeconomics - Introduction to...

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Introduction to Macroeconomics Big News in Financial markets Ben Bernanke Reverses Markets – Chairman of US Fed Reserve Board (most powerful person in US economics) hints US Fed would slash rates by 50 basis points this month. David Dodge – Chairman of Bank of Canada Mark Carney – Successor for David Dodge and Governor of Bank of Canada Direction of Interest rates – important because when interest rates are down, markets go up and vice versa Measuring a Nation’s Income Objective: Discuss some of the data that economists and policy makers used to monitor the performance of an economy, for example, how “rich” is a country. Gross Domestic Product GDP is the market value of all final goods and services produced within a country in a given period of time (loosely speaking, it is how much a country is producing) Stats Canada releases data on national and provincial GDP every three months Measurement of GDP “GDP is the Market Value…” o Output is valued at market prices. “…Of All Final…” o It records only the value of final goods, not intermediate goods (the value is counted only once) “…Goods and Services…” o It includes both tangible goods (food, clothing, cars) and intangible services (haircuts, housecleaning, doctor visits) “…Produced…” o It includes goods and services currently produced, not transactions involving goods produced in the past. “…Within a country…” o It measures the value of production within the geographic confines of a country. “…In a given period of time.” o It measures the value of production that takes place within a specific interval of time, usually a year or a quarter (three months). The components of GDP GDP includes all items produced in the economy and sold legally in markets. What is not counted in GDP?
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o GDP excludes most items that are produced and consumed at home and that never enter the arketplace. o
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This note was uploaded on 12/08/2009 for the course TEFLER ADM1300 taught by Professor Koppel during the Fall '09 term at University of Ottawa.

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Jan 14, Introduction to Macroeconomics - Introduction to...

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