Econ 2H03 - Chapter 2 Notes - 3

Econ 2H03 - Chapter 2 Notes - 3 - Government spending(G...

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Government spending (G) Government purchases of goods and services (21.9% of GDP): Government purchases, other than capital goods; Transfers. G excludes transfer payments (e.g., unemployment and welfare payments), because they do not represent spending on goods and services. Net Exports (NX) Net export (NX): foreign spending on domestic goods minus domestic spending on foreign goods Net exports of goods and services (-1.7% of GDP):
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Unformatted text preview: • exports minus imports, which in 2009 was negative Consumer Price Index (CPI) • The consumer price index ( CPI ) measures the cost of a basket of goods in current prices relative to the base year prices. • The basket should be occasionally updated or chain-weighted indexes should be used. • The rate of inflation is the percentage rate of change in a price index (the CPI, for example) over a period of time....
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