Economics classes in Canada

The Tutor and Student reviewed concepts of monetary and fiscal policy, including the roles of the Bank of Canada and government. They analyzed the causes and effects of inflation and deflation, their impact on Aggregate Demand (AD), and the short-run versus long-run consequences for the economy. The session concluded with an introduction to Keynesian theory and a preview of upcoming topics.

The tutor and student reviewed the definition and components of Gross Domestic Product (GDP) as a measure of national economic activity. They discussed the distinction between final and intermediate goods, the problem of double counting, and items excluded from GDP calculations. The session also began exploring the expenditure and income approaches to measuring GDP, detailing components of personal consumption and investment.

The Student and Tutor reviewed production functions, cost functions, and profit maximization in a perfectly competitive market. They worked through a problem involving a Leontief production function to determine optimal input ratios, cost, and output levels. The next session will cover the remaining parts of the problem set.

The session focused on the macroeconomic effects of tariffs on Canada, using the IS-LM-BP model to analyze the impact on exports, interest rates, and the balance of payments. The Student explored potential policy responses, such as monetary policy adjustments, to address the economic shock caused by the tariffs. The Student was given a recommendation to consider cutting interest rates as a potential policy to increase the money supply.