Econ 2 Week 2
Econ 2 Week 2 Econ 2
Popular in Introduction to Macroeconomics
Popular in Economcs
verified elite notetaker
This 2 page Class Notes was uploaded by Katherine Notetaker on Sunday April 17, 2016. The Class Notes belongs to Econ 2 at University of California - Santa Cruz taught by Ajay Shenoy in Winter 2016. Since its upload, it has received 14 views. For similar materials see Introduction to Macroeconomics in Economcs at University of California - Santa Cruz.
Reviews for Econ 2 Week 2
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 04/17/16
● Price ceiling is binding when it actually matters ○ However, price ceiling is not binding when it is above the equilibrium price ○ The price ceiling is only binding when it is below the equilibrium price ● Excess supply equates to surplus ○ A surplus of consumer goods moccurs when there is a binding price floor ○ The number of producers exceeds the number of consumers ○ Price floor only binds if it is above the equilibrium price ● Markets are useful because they can allocate resources efficiently ○ Meddling with the market generates perverse results ● Placing limits on the price of rent is very common ○ Rent control decreases developer’s incentives to build more units ● Deadweight loss occurs when total surplus is lost due to the distortion of market actions ● Deadweight Loss equals to Total surplus without distortions total surplus with distortion ● Gross domestic Product the market value of all final goods and services produced within a country in a year ● GDP per capita GDP/ population ● Market value add up the value of every good produced ● Intermediate good are sold to firms and then bundled or processed with other goods or services for sale at a later stage ● Final goods are the finished goods sold to final users and then consumed or held in personal inventories ○ To avoid double counting, only final goods are included in GDP ● Goods are tangible ● Services are intangible ● GDP measures production ○ Sale of used goods is not used ○ The sale of financial assets such as stocks and bonds are not included ○ The services of realtors, stock brokers, used car salesmen are included because their services represent current economic activity ○ Only production within a country counts of GDP ● Gross national product is the value of goods and produced by United states’ citizens no matter where they live ● In a year, GDP measures a flow, it measures a rate of production during a given time period ● In contrast to a nation’s wealth, the value of a nation’s assets at a point in time has no time dimension ● Nominal variables are valued at current prices ● Real variables valued at prices in some base year ● Real GDP is what welfare matters ● Most economists would choose real GDP as the best single indicator of economic performance ● Media usually report growth in nominal GDP ● If you want to compare GDP over time, ● Recessions two consecutive quarters of negative GDP growth ● Y= C + I +G + NX
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'