 |  Macroeconomics, 6/e Rudi Dornbusch,
Massachusetts Institute of Technology
Stanley Fischer,
International Monetary Fund, on leave from MIT
Richard Startz,
University of Washington
Frank Atkins,
University of Calgary
Gordon Sparks,
Queen's University
Measuring the Performance of the Canadian Economy
Chapter ObjectivesAfter reading and studying this chapter, you should be able to:
| Understand that gross domestic product is the value of all final goods and services produced in the economy. |
| | | | Understand that gross domestic product can be measured as the production of goods and services, which is supply, or as the spending on the goods and services, which is demand. |
| | | | Understand that we assume that goods are produced through a production function, which uses inputs of capital and labour to produce output; therefore, we can measure the value of the supply of goods and services by adding up payments to the factors of production. |
| | | | Understand that what is produced must be sold; therefore, we can also measure the value of gross domestic product by adding up spending on the components of demand: consumption, investment, government spending, and net export spending. |
| | | | Understand that in an economy the excess of savings over investment must equal the government budget deficit plus net export spending. |
| | | | Understand that the dollar value of gross domestic product can change if the level of physical production changes or if the price level changes. |
| | | | Understand that the real interest rate is equal to the nominal interest rate minus the inflation rate. |
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2002 McGraw-Hill Higher Education