1 / 18

Economics & Financial Literacy Ohio Academic Content Statement #4

Different economic systems (traditional, market, command, mixed) use different methods to allocate limited resources. . Economics & Financial Literacy Ohio Academic Content Statement #4. The health of a nation’s economy is influenced by governmental policy.

michon
Download Presentation

Economics & Financial Literacy Ohio Academic Content Statement #4

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Different economic systems (traditional, market, command, mixed) use different methods to allocate limited resources. Economics & Financial LiteracyOhio Academic Content Statement #4

  2. The health of a nation’s economy is influenced by governmental policy. Fiscal policy can be used to spur economic growth. Monetary policy can be used to moderate fluctuations in the business cycle. Government & the Economy

  3. Government & the Economy A nation’s overall level of economic well-being is determined by the interaction of spending and production decisions made by all households, firms, government agencies and others in the economy. Economic well-being can be assessed by analyzing economic indicators gathered by the government. Economics & Financial LiteracyOhio Academic Content Statement #7

  4. Indicator of a nation’s economic health basic measure of economic output of the total market value of all final goods and services produced in a country in a given year Gross Domestic Product (GDP)

  5. allows experts to see whether the economy is moving forward or regressing GDP

  6. United States

  7. Economists distinguish between the two • Nominal GDP is reflected in current dollars • Real GDP is adjusted for inflation • GDP = C + G + I + NX • where: • "C" - private consumption, or consumer spending • "G" - government spending(In the first 6 months of fiscal year 2012 (10/01/11-3/31/12), the US government spent $1.84 trillion.  For the entire fiscal year 2001, the US government spent $1.86 trillion, an amount that at the time was an all-time record (source: Treasury Department).   • "I" - businesses spending on capital • "NX" is the nation's total net exports, (NX = Exports - Imports) • VIDEO Nominal vs. Real GDP

  8. Consumer Price Index (CPI) • A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. • The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. • http://www.bls.gov/cpi/ Other Economic Indicators

  9. FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals and snacks); HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture); APPAREL (men's shirts and sweaters, women's dresses, jewelry); TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance); MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services); RECREATION (televisions, cable television, pets and pet products, sports equipment, admissions); EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories); OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses). The basket of goods - cpi

  10. Changes in CPI are used to assess price changes associated with the cost of living. • Video CPI

  11. Unemployment Rate • The percentage of the total labor force that is unemployed but actively seeking employment and willing to work. • From 1948 to 2004, the monthly U.S. unemployment rate has ranged between about 2.5% to 10.8%, averaging approximately 5.6%.  Other Economic Indicators (cont.) U.S. Unemployment Rate

  12. The unemployment rate is considered a lagging indicator, confirming but not foreshadowing long-term market trends. Video Unemployment Rate

  13. New Residential Sales • number of new single-family houses sold and for sale Other Economic Indicators (cont.)

  14. Number of new residential construction projects that have begun during any particular month New Residential Construction Report, aka "housing starts," is considered to be a critical indicator of economic strength. new residential construction

  15. A set of two data points produced by the Bureau of Economic Analysis that track personal income and monthly spending. • Personal income - $ value of income from all sources by individuals in the U.S. • Personal outlays - $ value of purchases of durable and non-durable goods and services by consumers in the U.S. • further explanation personal income and outlays

  16. A survey by the Conference Board that measures how optimistic or pessimistic consumers are with respect to the economy in the near future. consumer confidence index

  17. The idea is that if the consumers are optimistic, they will tend to purchase more goods and services. This increase in spending will inevitably stimulate the whole economy. Consumer confidence index

  18. Nation's international trade deficit in goods and services • Decreased to $46.0 billion in February from $52.5 billion (revised) in January, as exports increased and imports decreased U.S. international transactions

More Related