Economics

Economics-11/14/13 Appetizer: Which category do the following scenarios belong? What happens to GDP? Does it go up or go down? Spending is at the lowest it has been in decades. Manufacturing is up in the computer technology area. Our exports are greater than our imports. The budget has been cut to fund education. Main Course: Turn in your GDP collage please Review warm-up and GDP Gross Domestic Product (GDP) The market value of all final goods and services produced in a country in a calendar year. -2- Economic Growth An increase in real output as measured by real GDP or per capita real GDP. Unemployment The number of people in the civilian work force over the age of 16 without jobs who are actively seeking work. Consumer Price Index (CPI) A price index that measures the cost of a fixed basket of consumer goods and services and compares the cost of this basket in one time period with its cost in some base period. Changes in the CPI are used to measure inflation. Inflation A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (cost-push inflation). Stagflation A decline in real GDP combined with a rise in the price level. Aggregate Supply (AS) A schedule (or graph) that shows the value of output (real GDP) that would be produced at different price levels. -3- Aggregate Demand (AD) A schedule (or graph) that shows the value of output (real GDP) that would be demanded at different price levels. Notes on business cycle Look at debt clock Activity with GDP-you may work in small groups (no more than 4) Activator: How do we measure the success of our economy? Main Course: Discuss activator Turn in Steven Spielberg sheet if you didn’t turn it in on Tuesday after test. Notes from power point on GDP Create a collage on GDP: your paper must be labeled-GDP, C (consumer spending), G (government spending), investment spending (business spending), and Xm (imports-exports)-2 pictures for each: