Economic Indicators

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Economic Indicators
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• 1. If you put 200 into a savings account that
  had a 2 annual interest rate, how much money
  would you have after 1 year?
• a. 200 b. 202 c. 204 d. 208
• 2. Who or what backs the money that circulates
  throughout the country now?a. Gold b. Silver
• c. The government d. The paper money itself
• 3. An ATM account and Checking account are
  examples of what?
• a. Demand deposit b. Time Deposit c. FDIC d.
  Barter
• 4. Who is most likely to make a decision that
  will affect MONETARY policy and interest rates?
• a. Congressmen b. The President c. A Mayor d. The
  Fed
• 5. If there is too much money in circulation, the
  government should use a ____________ monetary
  policy because they will ______________ interest
  rates.
• Tight, raise b. Tight, lower
• c. Loose, raise d. Loose, lower

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• UNIT 2 Review
• ____6. Which power of the legislative branch
  restricts the power of both the executive and
  judicial branches?
• a. taxation b. financing the army and navy
• c. impeachment d. declaring war
• ____7. In what ways can the president influence
  the laws passed by Congress?
• a. by suggesting laws to be passed by
  Congress b. by appointing Supreme Court judges
• c. by saying what the law is d. by passing
  new laws
• ____8. Which choice best summarizes the powers of
  the executive branch?
• a. the executive branch reviews the laws to make
  sure they follow the constitution
• b. the executive branch makes the laws and
  confirms federal appointments
• c. the executive branch vetoes laws from
  Congress
• d. the executive branch carries out the laws
  through the presidency and executive branch
  departments
• ____9. Under Article III ,which branch has the
  power to declare laws unconstitutional?
• Executive branch b. Congress
• c. Judicial branch d. Legislative branch
• ____10. Which of the following best describes why
  Congress has two branches?
• a. to check the power of the president b.
  to give more power to the large states
• c. to balance power between small and large
  states d. to pass laws more quickly

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Goals

• Identify the different parts of the business
  cycle.
• Determine what part of the business cycle a
  nation is in based on different economic
  indicators.

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• What are some events that occur in cycles (No!
  Not bicycles)

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• Finish the statement what goes up, must come
  __________.

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Economic Indicators

• Indicators help us tell how well an economy is
  doing. They include
• Unemployment people who can work but are without
  employment
• Inflation (CPI) the general increase in prices
  over time. Inflation often occurs during
  expansion because consumers have more to spend
  causing demand to increase.
• PPI (producer price index) Used by producers to
  see how much the goods/services they need for
  their businesses will cost.

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• Productivity/GDP total of all the final products
  produced in a country
• Stock Market (bull vs bear market) where shares
  of corporations are bought and sold.

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Employment

• Unemployment measures the people who can work
  but do not have jobs.
• Full Employment when all people who can work
  have jobs
• Underemployment having a job which you are
  overqualified and underpaid for.
• Ex PhD. working at McDonalds

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GDP Gross Domestic Product

• Total value of all the final products that are
  produced within a country in one year.
• Final products a good sold to a user (as opposed
  to all the ingredients of that product). The
  car, but not the steel or the rubber that went
  into making it

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Per Capita GDP

• GDP divided by a countrys population
• In other words The GDP per person

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Per Capita GDP

• GDP takes into account the Standard Of
  Living-measure of quality of life, higher GDP
  higher standard of living.

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• The darker the blue, the better Per Capita GDP.
  Hows the US doing?

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CPI or the Consumer Price Index

• Measures inflation rates for the nations economy
• Inflation the general rise in price of an item
  over time.
• Is determined by measuring the price of a
  standard group of goods meant to represent the
  market basket of a typical consumer.

• Market Basket might include cost of.
• Food and drinks
• Medical care
• Housing
• transportation

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How much do these cost?

• In March Then again
• in May.

• Market Basket might include cost of.
• Food and drinks
• Medical care
• Housing
• transportation

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The Stock Market

• Where shares of corporations are bought and sold.
• Dividends money earned by your share of a stock
• Capital Gains money earned when you sell your
  stock
• Bull Market Rising
• Bear Market falling

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Bear vs. Bull Market

• The Chicago Bears just arent that good and often
  FALL, just like a bear market.
• When Michael Jordan was on the Chicago Bulls, he
  would always rise up to dunk just like the rising
  market.

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The Business Cycle
Expansion
Peak
Contraction
Trough
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Contraction (a.k.a. Recession)

• Economy is DECLINING
• Bear market
• GDP down
• Unemployment is RISING

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Trough (a.k.a. Depression)

• Economy is at its LOWEST
• GDP at LOWEST
• Unemployment is at its HIGHEST
• EX the Great Depression 1929-1939

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Stock Market Crash1929, Black Tuesday
Wall St.
Run on the banks! NO FDIC
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The Great Depression
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The Great Depression
1933 unemployment25Today unemployment 8.6
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Expansion

• Economy is IMPROVING
• Bull market
• Inflation (CPI rises)
• GDP up
• Unemployment is FALLING

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Peak (a.k.a. Boom)

• Economy is at its HIGHEST
• GDP is at its HIGHEST
• Unemployment at its LOWEST
• EX the dot com boom in the 1990s

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The Business Cycle
___________
___________
___________
___________
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Decide whether each scenario represents a Peak,
Trough (Depression), Contraction (Recession) or
Expansion

• 1. Americas Dow Jones (stocks of the 30 largest
  American Companies) has fallen for the 60th day
  in a row. Unemployment rose from 5 to 7 from
  January to May. The GDP declined for the 5th
  consecutive month this year. What part of the
  business cycle is America in?____________________

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Decide whether each scenario represents a Peak,
Trough (Depression), Contraction (Recession) or
Expansion

• 2. Russias stock market crashes. The value of
  the Russian Ruble (Russias currency) sinks to
  its lowest level in a decade. Millions of
  Russians find themselves unemployed as the
  unemployment rate rises to 25. The price of
  necessary goods skyrockets and thousands of
  Russians starve, unable to afford bread.
• What part of the business cycle is Russia
  in?____________________

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Decide whether each scenario represents a Peak,
Trough (Depression), Contraction (Recession) or
Expansion

• 3. Chinas stock market has been on the rise for
  2 straight years. Chinese productivity has
  increased steadily each year as countries around
  the world buy more and more cheap Chinese goods.
  Chinas GDP reached its highest point. Chinas
  unemployment rate has steadily declined for the
  past 10 years in a row. Today it is at its
  lowest rate ever (4.2). The price of Chinese
  goods has declined making them affordable to the
  majority of Chinese people.
• What part of the business cycle is China
  in?____________________

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Decide whether each scenario represents a Peak,
Trough (Depression), Contraction (Recession) or
Expansion

• 4. After a recession the French economy has been
  on the rise. French productivity has risen a
  little each year. Frances unemployment rate has
  steadily declined by .5 from January to May.
  Frances GDP was up for the second month in a
  row.
• What part of the business cycle is France
  in?____________________

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Business Cycle Art

• Fold your paper into quadrants
• Label each quadrant one part of the business
  cycle.
• Draw the Business cycle
• Include information about what happens in each
  part.

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The Business Cycle
Peak

• Economy is at its HIGHEST
• Unemployment at its LOWEST

Expansion

• Economy is at its LOWEST
• Unemployment is at its HIGHEST

Contraction
Trough
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• 1. The U.S. Bureau of Labor Statistics annually
  produces the consumer price index (CPI), which
  measures average price changes in relation to
  prices in a chosen base year. What is the CPI
  most likely measuring?
• a. inflation and deflation
• b. imports and exports
• c. employment and unemployment
• d. inputs and outputs

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• 2. In the business cycle, recessions, downturns,
  downswings, and liquidations are also known as
• Inflation
• contractions
• Prosperity
• expansions

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• 3.  What is another term for expansion in the
  business cycle?
• Downturn
• Recovery
• Trough
• Surplus

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• 4. The steady rise in prices measured by an index
  of the cost of various goods and services is
  known as
• a. GDP
• b. Per capita GDP
• c. Inflation
• d. Deflation

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• 5. Which term describes the total value of goods
  and services produced in a country in a given
  year?
• a. GDP
• b. CPI
• c. Debt
• d. Recession

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• 6. What historical event is an example of an
  economic trough in the United States
• a. Rockefellers Oil
• b. Great Depression
• c. Cotton Gin
• d. Creation of the UN

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• 7. Which term is used to describe the inability
  to find employment by workers who are able and
  willing to work?
• a. Underemployment
• b. Full employment
• c. Unemployment
• d. GDP

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FINAL EXIT TICKET QUIZ1. DRAW THE SNAKE GRAPH
BELOW2. LABEL EXPANSION RECESSION TROUGH
AND BOOM3. AT EACH PLACE, EXPLAIN HOW GDP IS
DOING4, AT EACH PLACE EXPLAIN HOW UNEMPLOYMENT
IS DOING