Lecture 2

Lecture 2 - Econ101 Lecture2 ClicktoeditMastersubtitlestyle

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Click to edit Master subtitle style Econ 101 Lecture 2 Measurement of Economic Activities
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Administration n iClicker n You will start receiving points on Monday. n 1 point for responding n 2 additional points for responding correctly  n Register your iClicker on iclicker.com using your  Perm number n Frequency: all work
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Where are we? n Measurement of Economic Activities n Consumer and Firm behavior n Closed Economy One Period Model n Economic Growth n Savings, Investment and Government  Deficits n Business Cycles
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Gross Domestic Product  (GDP) n Measure of aggregate economic activity Nominal GDP = dollar value of goods and services produced in an economy during a year Real GDP = measure of the quantity of goods and services produced in an economy during a year
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A simple example n Suppose everyone picks apples from  trees n Price of an apple in year t is  Pta n The number of apples picked in year t is  Qta   n Nominal GDP in year t is  Pta * Qta
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A simple example n Growth in nominal GDP from year t to  t+1 is n Growth in real GDP from year t to t+1 is
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A more interesting example n Suppose now that households get utility  from both apples and oranges n Look at years 1 and 2
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Example n Nominal  GDP in year 1 n Nominal  GDP in year 2 n % increase in Nominal GDP
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Lecture 2 - Econ101 Lecture2 ClicktoeditMastersubtitlestyle

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