Chapter 4 Flashcards
Every business cycle has 2 phases and 2 turning points. What are they?
2 phases: Expansion and Recession
2 turning point: Peak and trough
How to calculate the standard of living over time?
Real GDP/Population
What is the formula for calculating the GDP using the expenditure approach?
Y= C+ I + G +(X-M)
What makes up most of the GDP Calculation?
Compensation of expenditure
Potential GDP is…
the value of real GDP when all the economys labour, capital, land, and entreprenueral ability are fully employed
True or False
GDP equals Aggreagte income and also equals aggreagte expenditure.
True
PPP stands for…
Purchasing Power Parity
GDP is…
the market value of final goods and services produced within a country in a given period of time
Exports are…
goods and services that firms in Canada produce and sell to any other country
Imports are…
goods and services are item that households firms, and governments buy from the rest of the world
To calculate GDP at basic prices…
Market Price = Factor Costs + Income Taxes
Expansion is…
a time where real GDP increases
Real GDP is.
the value of final goods and services produced in a given year when valued at the prices of a preference base year
Potential GDP is…
the maximum level of real GDP thatcan be produced while avoiding shotages of labour, capital, land, and entrpreneurial ability that would bring inflation
PPP means..
we can calculate the value of goods and services produced in2 countries using the same prices
