1. Today’s Economics Class : ) (17 April, 2012) 1.Follow-up on Application Activity: “Exploring the Stock Market” and your economic analysis. 2.Introducing Macroeconomics: The Big Picture 3.Gross Domestic Product and measuring our economic health. 4.Key Question # 3, Page 149.

2. Exploring the Stock Market Economics Class Handouts - Exploring the Stock Market Economics Class Handouts - Exploring the Stock Market Utilize this information to make a rational economic decision in our HCSS Economics Virtual Stock ExchangeHCSS Economics Virtual Stock Exchange Current Power Rankings Stephen $101,425 and 9 Trades Brock $100,202 and 2 Trades Rosa $99,703 and 4 Trades

3. Introduction to Macroeconomics The Big Picture and Global Dynamics

4. What is Macroeconomics? It is an examination of the economy as a whole instead of the individual firm. We examine large aggregates like the Canadian economy, the U.S. economy, and the global economy. We look at figures such as Gross Domestic Product, Inflation, and measures of national happiness or unhappiness like the unemployment rate and the “Misery Index.”

5. Assessing the Economy as a Whole How? National Income Accounting: Measures the overall performance of the economy. It is similar to what private accounting does for the individual firm, except for the economy as a whole.

6. Assessing the Economy as a Whole Who? Organizations like Statistics Canada and the Bank of Canada help to compile the necessary data. They do this by tracking consumer and business purchases or spending.

7. Assessing the Economy as a Whole Why? It helps us track the long-run course of the economy to see whether it has grown or declined, and to help us make policy decisions. The Drummond Report and the Ontario Finance Minister had to engage in Provincial/National Income Accounting.

8. Gross Domestic Product (GDP) Measures Aggregate Output: The total market value of all final goods and services produced in a given year.

9. GDP is a Monetary Measure GDP is a monetary measure used to compare the relative values of goods and services over time. GDP is generally measured every quarter or year. It is often seen as the total amount of wealth produced by a country. New Tools allow economists to access vast amounts of data on the health of the economy. New Tools

10. What Exactly Does GDP Measure? GDP includes all goods and services produced by either domestic or foreign-supplied resources in the country. Canadian GDP includes the market value of goods sold by both Canadian and Foreign businesses operating in Canada. Coffee sold at Canadian owned Tim Horton’s or American owned Starbucks counts, as long as the purchase is made in Canada.

11. Thinking & Inquiry The Hollowing Out of Corporate Canada

12. Only Final Goods Count Towards GDP. Intermediate Goods: Goods and services purchased for resale or further processing. Ex: The sale of wood for use in the production of a new home in Canada. Final Goods: Goods and services purchased for final use by the consumer, not further processing. Ex: The sale of the new house, which already includes the cost of the wood in its sale price. NB. More details tomorrow.

13. GDP Excludes Non-Production Transactions Financial Transactions: Public and Private Transfer Payments and Stock Market Transaction. Ex. Buying a stock or a bond. Second-Hand Sales: They were counted when they were originally produced. Ex. The sale of a used car. Black-Market Sales: Anything not reported to the government cannot be tracked. Ex. Stolen goods.

14. Key Question # 3 (Page 149) Assignment 2.1 Why do national income accountants include only final goods in measuring GDP for a particular year? Why don’t they include the value of the stocks and bonds bought and sold? Why don’t they include the value of used furniture bought and sold? Write down your answers during our discussion and hand them in.