03+-+Chapter+02 - MGTA03 – Intro to Management – Week 3...

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Unformatted text preview: MGTA03 – Intro to Management – Week 3 MGTA03 Please read Chapter 2: Please Understanding the Environment of Business of Purpose of this chapter/lecture Purpose Introduce measures of economic performance: Gross Domestic Product (GDP) GDP / capita Productivity Inflation Unemployment Purpose of an economic system Purpose To assemble / organise resources; To make things that people want; So people will buy them; Creating profits for suppliers; So that everyone will be better off. Measuring economic performance Measuring Is the economic system producing: lots of things that people want? more things every year? quickly and efficiently? at reasonable prices? using all the available resources? Is economy producing things? Is Gross domestic product (GDP): ): $ dollar value of all goods and services produced in a country in one year. produced The larger the GDP: The more workers, using more resources, are producing more things of value. are Countries with largest GDP - 2007 Countries 1 2 3 4 5 6 7 8 9 10 10 United States United Japan Germany Germany China (PRC) China United Kingdom United France France Italy Italy Spain Spain Canada Canada Brazil Brazil $ 13,811 billion 4,376 billion 3,297 billion 3,280 billion 2,727 billion 2,562 billion 2,107 billion 1,429 billion 1,326 billion 1,314 billion GDP – Annual Growth GDP GDP Growth: more people making more GDP stuff. Falling GDP: fewer people buying less stuff. Falling Canada (and other big countries): Long term GDP ): growth: 2 - 3% per year growth: China and India: Recent growth: 8 – 10% Recession: GDP falling Fastest Growing GDP - 2008 Fastest 1 2 3 4 5 5 6 7 8 9 Azerbaijan Azerbaijan Angola Qatar Equatorial Guinea Equatorial Anguilla Anguilla Republic of the Congo Republic Solomon Islands Solomon Mongolia Mongolia China China Armenia Armenia 15.6% 15.1 11.8 11.5 10.2 10.2 10.0 9.9 9.8 9.4 Falling GDP - 2008 Falling Country % Decline Reason(s) Decline Reason(s) Fiji -6.6% Coups, unstable government Zimbabwe -6.2% Human rights abuses and Human high inflation (+2,000,000%) high North Korea -1.1% Human rights abuse, Human problems in economy problems Ireland -0.7% Late 2000s recession Late Latvia -0.6% Late 2000s recession Latvia Productivity: producing things quickly and efficiently quickly Productivity: ratio of inputs (time, effort, $$$) to ratio outputs (products and services of value) Productivity: how many man-hours, $$ or tons of Productivity how resources does it take to make stuff? resources Historically, Canada’s productivity c. 20% lower Historically, 20% than US. than Canadian population = 1/10 US population. Canadian GDP = 1/12 US GDP Canadian 1/12 Productivity Productivity Canadian population = 1/10 US population But Canadian GDP = 1/12 US GDP But 1/12 Canada’s productivity 20% lower than US Canada’s 20% Productivity Productivity In other words: Canadian workers - on average - produce Canadian goods or services with a value that is only 80% of what American workers produce. Why?.... Why?.... GDP - per capita Rank Country GDP - per capita 1. Liechtenstein $ 118,000 2. Qatar $ 103,500 3. Luxembourg $ 81,100 4. Bermuda $ 69,906 7. Norway $ 55,200 10. United States $ 47,000 11. Ireland $ 46,200 18. Netherlands $ 40,300 21. Canada $ 39,300 26. Australia $ 38,100 34. Germany $ 34,800 GDP - per capita 103 104 105 133 226 227 228 229 230 World $ 10,400 Brazil $ 10,100 South Africa $ 10,000 China $ 6,000 Somalia $ 600 Liberia $ 500 Burundi $ 400 Congo $ 300 Zimbabwe $ 200 At reasonable prices? At Inflation - Prices for goods are going up. Inflation: People afford to can buy less. Inflation punishes people on fixed incomes Inflation (pensioners). (pensioners). Suggests: shortages of things people want. Inflation rate (consumer prices) Inflation Country (%) Country (%) San Marino Niger Canada France UK United States Brazil -3.50 0.10 1.00 1.00 3.80 4.20 5.80 China 6.00 Russia 13.90 Ukraine 25.00 Kenya 25.50 Venezuela 31.00 Ethiopia 41.00 Zimbabwe 11,200,000 Is Economy Using Resources At Its Disposal? Disposal? Unemployment: A key factor of production Unemployment: labour - is underutilised. labour Unemployment rate: The % of people who Unemployment would like to work but can't find work. like (i.e. The unemployed are people who are (i.e. actively looking for work) looking Unemployment Rate - 2007 Unemployment Rank Rank 1 2 3 62 101 113 126 129 134 139 Countries Countries Nauru Nauru Liberia Liberia Zimbabwe Zimbabwe Poland Poland France France India India Canada Canada Russia Russia United Kingdom United United States United Rate % Rate 90% 85% 80% 12.8% 7.9% 7.2% 6.0% 5.9% 5.3% 4.6% ...
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This note was uploaded on 06/18/2011 for the course MGT a03 taught by Professor Bovaird during the Spring '11 term at University of Toronto- Toronto.

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