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Understanding Economic Indicators

Understanding Economic Indicators. Unemployment Rate- the number of people who can work can’t find work. Productivity- the amount of a good or service that one worker can produce in one hour. To increase: Improved technology Worker training

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Understanding Economic Indicators

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  1. Understanding Economic Indicators

  2. Unemployment Rate- the number of people who can work can’t find work

  3. Productivity- the amount of a good or service that one worker can produce in one hour • To increase: • Improved technology • Worker training • Effective management techniques

  4. Consumer spending-the demand for goods and services

  5. Inflation vs. Deflation • Inflation- general increase in prices • Hyperinflation (prices rise at an extremely rapid pace) • Mild inflation is generally healthy for an economy • Deflation- general decrease in prices

  6. Interest Rates- the cost of borrowing $ • Examples of borrowing include: • Mortgages (buying a house) • Cars • Credit cards • Business loans

  7. Investing- • Putting our money to work in the hopes it will grow over time

  8. Real Estate- Buying and selling of land and anything attached to it

  9. investing in a company or government through lending $ in return for interest Bonds-

  10. Stocks- Investing in a company by buying partial ownership

  11. Balance of Trade- the difference between a nation’s imports vs. exports

  12. GDP (Gross Domestic Product)- • The total dollar value of all final goods and services produced in a country in one year • Example of final good: • Range Rover • Example of intermediate good: • Steel for the car frame

  13. GDP per Capita- used to compare gdp from country to country • Calculated by taking GDP divided by the country’s total population

  14. Example: • Aruba’s GDP is $10,000,000 • Aruba’s population is 100,000 people • GDP per capita= 10,000,000 100,000 $100

  15. GDP Base Year (Constant Price)- • Takes price change out of the equation and focuses on production

  16. Economic Indicators • After reviewing and analyzing each of our indicators, we should be able to reasonably predict the current status of our overall economy

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