Economic Performance

1
Economic Performance
2
Gross Domestic Product (GDP)

• Measure of National Output
• Multiplying all final goods and services produced
  in a 12-month period by prices
• Is somewhat limited because it does not measure
  secondhand sales and the underground economy.

3
What is the underground economy?

• Jobs that are under the table
• Criminal oriented activity including drugs,
  gambling, smuggling, prostitution, and
  counterfeiting.

4
Personal Income

• The total amount of income going to consumers
  before individual income taxes are subtracted.
• Disposable Personal Income
• The total income the consumer sector has at its
  disposal.

5
Inflation

• The rise in the general price level.
• Determined by a price index.
• Choose a base year.
• Select a market basket of goods.
• What percentage has the market basket of goods
  increased by year.

6
Consumer Price Index

• Reports changes in the prices of thousands
• consumer goods and services.

7
Economic Growth

• Beginning in 1991, the United States enjoyed the
  longest period of prosperity in its history, with
  the economy growing at a robust 3.9 percent in
  1999.
• Economic growth is best measured by real GDP per
  Capita That is GDP, adjusted for inflation,
  divided by the population.

8
Importance of Economic Growth

• Increases standard of living
• Increases the tax base allowing government to
  provide services
• Helps reduce poverty

9
Factors influencing economic growth

• Available Natural Resources
• High capital to labor ratio
• Skilled and growing labor force
• Entrepreneurs contribute to economic growth.

10
Economic Growth facts

• Economic growth is cyclical, goes up and down
• Recession- Real GDP declines for two quarters in
  a row.
• Expansion- A period of recovery from a recession.

11
Leading Economic Indicators

• Statistics that economists monitor to assess and
  predict trends in the economy.

12
Unemployment

• The percentage of unemployed people divided by
  the total number of people in the civilian work
  force.
• Unemployment rate does not include those
  discouraged from finding work or those working
  part time that wish to work full-time
• Happens for many reasons, many feel our region
  has been hurt by NAFTA.

13
Poverty

• Having an income below a certain level (Poverty
  Guidelines)
• More than 12 percent of the population lives in
  poverty

14
CPI (Consumer Price Index)

• http//www.bls.gov/cpi/cpid1310.pdf
• http//www.bls.gov/cpi/cpi_dr.htm2013

15
Poverty Rates

• http//www.census.gov/prod/2013pubs/acsbr12-01.pdf