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Essential Standard 1.00

Essential Standard 1.00. Understand the role of business in the global economy. Objective 1.02. Understand economic conditions. Topics. Measuring economic activities Classifying economic conditions. Measuring Economic Activities. Gross Domestic Product (GDP). GDP Major categoriesof GDP

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Essential Standard 1.00

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  1. Essential Standard 1.00 Understand the role of business in the global economy.

  2. Objective 1.02 Understand economic conditions

  3. Topics • Measuring economic activities • Classifying economic conditions

  4. Measuring Economic Activities

  5. Gross Domestic Product (GDP) • GDP • Major categoriesof GDP • Individual spending • Business spending • Government spending • Exports & imports • Name some products or services you have purchased or from which you have received benefits. • Which component of GDP would you classify the product or service you named?

  6. GDP per capita GDP per capita – output per person =_________GDP__________ Total Population

  7. Labor Activities • Unemployment rate • Productivity means … • What can help you be more productive in a computer lab? • What can contribute to employees increasing their production?

  8. Consumer Spending Measurement of consumer spending: • Personal Income • Retail Sales

  9. Investment Activities • The money used for capital projects comes from three main sources: • Personal savings • The stock market • The bond market • How does each investment activity impact economic growth? • What are some examples of investment activities?

  10. Borrowing Activities … • by • Government • Businesses • How can government borrowing lead to a budget deficit? • How can using borrowed money wisely impact businesses?

  11. Measuring Economic Activities GDP Per capita GDP Labor Activities Consumer Spending Investment Activities Borrowing Activities

  12. Classification of Economic Conditions

  13. Prosperity Employment rate and demand for products and services are high. Recession Unemployment rate is increasing and demand for products and services are lowering. Recovery Unemployment rate is lowering and demand for products and services is increasing. Depression Unemployment rate is high and demand for products and services is lowering.

  14. Over a three-year period, how has the income been impacted by the cost of a gallon of milk?

  15. Consumer Prices • Inflation • Causes of inflation • Consumer Price Index (CPI) • Deflation • Causes of deflation

  16. Interest Rates Types: Prime rate Discount rate T-bill rate Treasury bond rate Mortgage rate Corporate bond rate Certificate of deposit rate What is the primary purpose of each? • How do interest rates impact businesses?

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