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General Business. Unit 1 – Economic Roles Chapter 4 Economic Measurements. Book Time. Page 41 Read aloud. Classwork. Hand-Out CW-4-1 Individual work Check if done Review. Economic Growth. Steady increase in production in an economic system High rate of employment

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general business

General Business

Unit 1 – Economic Roles

Chapter 4

Economic Measurements

book time
Book Time
  • Page 41
    • Read aloud
classwork
Classwork
  • Hand-Out CW-4-1
    • Individual work
      • Check if done
      • Review
economic growth
Economic Growth
  • Steady increase in production in an economic system
    • High rate of employment
    • Low rate of business failure
slide5
GDP
  • Gross Domestic Product
    • Total $ value of all final goods/services produced during 1 year
      • Measure of how economy is performing
slide6
GDP
  • 3 major categories of expenditures
    • 1. What consumers spend for food, clothing & housing
    • 2. What businesses spend for buildings, equipment & supplies
slide7
GDP
  • 3 major categories (cntd.)
    • What government agencies spend to pay employees and to buy supplies
slide8
GDP
  • Doesn’t include:
    • Value of work we do for selves
      • Mowing lawn
      • Cleaning house
slide9
? GDP ?
  • Why is the value of the work we do for ourselves not included as part of the GDP?
slide10
GDP
  • Includes only final goods
  • Intermediate goods not counted
    • Manufacturing goods
      • Raw materials – steel, iron ore
slide11
GDP
  • End of 1990’s:
    • GDP = >$8.5 trillion
  • Comparison year to year
    • Prices must be adjusted to be “equal value”
classwork1
Classwork
  • Hand-Out CW-4-2
    • Individual Work
      • Check if done
      • Review
base year
Base Year
  • Year chosen to compare an item / price, to another year
constant dollar gdp
Constant Dollar GDP
  • Value of GDP after removing effect of price changes
    • Also called “Real GDP or GDP in Real Terms”
determine real gdp for the following years
Determine Real GDP for the Following years

6883.3

7066.3

7348.2

7543.8

7813.2.

8163.3

8517.6

8873.3

gdp per capita
GDP Per Capita
  • Output per person
    • Divide GDP by total population
      • Increase = growing economy
      • Decrease = economic trouble
productivity increase
Productivity Increase
  • Increase in goods/services from same # of workers
    • Improved quality of capital resources (equip.)
    • Worker training
    • Management techniques
classwork2
Classwork
  • CW-4-3
    • Individual work
      • Check if done
      • Review
business cycle
Business Cycle
  • Recurring ups & downs of GDP
  • Movement of economy from 1 condition to another & back again
  • Cyclical pattern
business cycle1
Business Cycle
  • 4 phases
    • Prosperity
    • Recession
    • Depression
    • Recovery
prosperity
Prosperity
  • High point of cycle
    • Want to work = job
    • Businesses produce record amounts
    • Wages good
    • GDP grows
      • Boom period
recession
Recession
  • Economy slows
    • Demand decreases
    • Businesses lower production
    • Unemployment rises
    • GDP slows for 2+ qtrs.
    • Drop in related businesses
      • Ripple effect
depression
Depression
  • Recession deepens & spreads thru out country
    • Prolonged period of high unemployment
    • Weak sales
    • Business failures
    • GDP falls rapidly
depression1
Depression
  • Great Depression
    • 1930-1940
    • 25% of labor force unemployed
      • Couldn’t afford basic needs
recovery
Recovery
  • Nation moves into prosperity
    • Unemployment decreases
    • Increased demand for goods/services
    • Businesses produce more
inflation
Inflation
  • Sustained increase in prices
    • Greater demand than supply
      • Prices rise faster than wages
      • Pay higher prices
inflation1
Inflation
  • Sustained increase (cntd.)
    • Mild inflation (2-3%) stimulated economic growth
      • Companies sell goods higher prices, profits increase, hire more workers who then spend money in economy
deflation
Deflation
  • Decrease in prices
    • Usually during recession or depression
    • Prices lower, but people have less money to buy
book time1
Book Time
  • Read pg. 47
    • Global Perspectives
      • Hyperinflation
  • Answer 2 ?’s
    • Check if done
    • Review
slide30
Read
  • Chapter 4 – entire
  • Communicating for Success – pg. 51
    • Answer 2 ?’s
study guide
Study Guide
  • Pgs. 15-18
    • Groups 2-3
      • Turn in 1 S.G. for group
      • Review in class
computer time
Computer Time
  • Web-Site:
    • http://stats.bls.gov/
      • At a Glance Tables: right
      • U.S. Economy at a Glance: look at unemployment rates
      • Go to: other avail. @ a glance
      • Go to PA: look at data
the end

The End

Unit 1

Chapter 4