Economic Indicators and Metrics
Explore a variety of economic indicators and metrics such as consumption expenditures, GDP calculations, capital stock, and more. Learn how to analyze metrics like net investment and gross investment to evaluate the economic growth and performance of a country or company.
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Consumption expenditures = $600 Exports = $75 Government purchases of goods and services= $200 Construction of new homes = $100 Imports = $50 Beginning of year inventory = $100 End of year inventory = $125 Business fixed investment = $100 Government payments to retirees = $100 Household purchases of durable goods = $100
Consumption expenditures = $600 Exports = $75 Government purchases of goods and services= $200 Construction of new homes = $100 Imports = $50 Beginning of year inventory = $100 End of year inventory = $125 Business fixed investment = $100 Government payments to retirees = $100 Household purchases of durable goods = $100
Your mother buys a new car imported from Sweden Your mother s car rental business buys a new car imported fro Sweden
A student is paid for shovelling a neighbours sidewalk Unemployed carpenter receives an employment insurance payment A wealth-holder sells 1000 shares issued by a Canadian corporation
Page 220 Capital stock: the total value of assets that provide a flow of revenue Net investment: gross investment depreciation
Q: How much is Metrica's capital stock expanding or contracting in 2001? Look at depreciation ($79 billion) Look at gross investment ($157 billion) Metrica is investing $157 billion BUT $79 billions are lost in repairing or replacing durable assets Net investment = $157 billion - $79 billion = $78 billion Look at depreciation ($79 billion)
Is GDP Expenditure method calculated using Net Investment or Gross Investment? Expenditure approach = Consumption + Government Expenditure + Net Exports (Exports Imports) + GROSS INVESTMNET
Inflation: General goods and services in an entire economy over time. Deflation: General prices General increase in the prices of General decrease in the level of
If Canada has an annual inflation rate of 3%, are all the prices rising? Inflation does not mean all the prices are rising. Some prices are rising, while other prices constant or even decrease. It is that OVERALL prices are rising in 3%.
Consumer Price Index (CPI): a measure of price changes for a typical shopping basket of consumer products. To determine what typical Canadian households buy, Statistics Canada surveys consumers buying habits every few years.
Suppose the shopping basket includes only two items: pizzas and colas. Survey in 2000 shows that, each month, an average consumer buys 20 hamburgers at $2 each, and 20 bottles of Cola at $1 each.
If the CPI rose from 100 in 2010 to 115 in 2011, what is the inflation rate over the year?
What is the difference between nominal income and real income? Nominal income: income expressed in current dollars Real income: income expressed in constant base-year dollars
Real income = nominal income/ CPI in hundredths EX. Nicole s income rises from 40,000 to 45,000 during a year when the CPI rises from 100 to 110. If the consumer s own monthly purchases roughly correspond to those in the representative shopping basket, what s Nicole s personal impact of inflation?
Textbook Question #1 Exit Slip: Christine s income rises from $34,000 in 2012 to $35,000 in 2013. Inflation rate over the year is 6%. a) What is Christine s real income? b) Explain whether following statement is true or false: Since Christine s income rose, she has a higher standard of living. Exit Slip:
