Transcript AP Week 5 - Ector County ISD

AP Week 5
Test over Supply and Demand
Start Measuring the Economy
Section 3 Modules 10-15
This unit is very formula driven
MondayYOU HAVE A TEST MODULES 5-9
TOMORROW. VOCABULARY CARDS FOR BONUS. DUE
WHEN YOU COME IN. NO LATE CARDS TAKEN.
• Objective: write a one pager with clarity and depth to describe one of the
economic concepts studied so far.
• Write with proper format, structure of paragraphs and sentences to show
flow and support to your thesis.
• Do Now: Look back over your notes and decide if you would rather
construct a one pager on the basic concepts of scarcity, limited resources
and choices, or about trade, specialization and comparative advantage , or
with supply and demand. Find information that would support your thesis
on the topic you chose.
• EQ: How can I develop a thesis statement over an economic topic and then
support it with terms and make it understandable to someone that has not
studied economics?
• Turn in the worksheets on Supply and Demand
Write a one pager for WAC on one of these or
make your own regarding a topic we have covered.
• We have studied the basic concepts of economics with a focus on the
scarcity of resources and unlimited wants. Describe how the production
possibility curve demonstrates these along with opportunity cost.
• Discuss foreign trade with specialization and comparative advantage along
with voluntary exchange. Explain what comparative advantage is and how
it works.
• Discuss supply and demand, what does the graph show? What is the
difference between change in quantity demanded versus change in
demand as well as quantity supplied versus change in supply. What are the
shifters and importance of equilibrium. You can discuss ceilings, floors,
government regulations impact, or deadweight.
• YOU CAN DRAW THE GRAPH AND PROPERLY LABEL OR THE TABLE AND
MATH TO SUPPORT YOUR MATERIAL.
TUESDAY- we will start the next unit
tomorrow. Read for this week Module 10-11
• Objective: demonstrate what you have learned so far.
• TEST- read the questions very careful, look for the cue words. Mark
your scan tran carefully.
• Do Now: Get your name and period on the answer document. Clear
your desk with everything but a pencil.
• EQ: Did you read the text? Did you answer the questions for each
module? Did you study the vocabulary? In other words, how
prepared are you for this?
Wednesday:
• Objective: Be able to create and explain the flow of resources, money
and goods/services. Show how the government, foreign nations, and
banking are part of this flow.
• Be able to share with your shoulder partner your understanding of
the CFM.
• Do Now: Consider what the relationship is between households and
firms.
• EQ: What are the 2 markets? Who buys and sells in each market?
What is the national account and how is it used?
The Circular Flow Model shows the
principles behind the national accounts
The Product Market•The “place” where goods and services
produced by businesses are sold to households.
The Resource (Factor) Market•The “place” where resources (land, labor,
capital, and entrepreneur) are sold to
businesses.
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DEMAND
Resource Market
Individuals
Businesses
SUPPLY
SUPPLY
Product Market
DEMAND8
National Accounts
• A set of accounts maintained by virtually all countries that
tracks the income received and the value of goods and
services, or simply put the flow of money between
households, firms, government, foreigners and banks. In
the simplest illustrations it is simply between the
households and the firms.
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Hand out the expanded CFM to put into your
notebook
• https://www.youtube.com/watch?v=mN5HPJYJzus ACDC intro CFM 4 min.
• Hand out activity sheets and complete.
• In the expanded version we add the role played in both markets by the
government, foreigners and the financial institutions.
• THE CRITICAL THING HERE IS THAT ALL THE MONEY EARNED IS SPENT AND FOR
THIS MODEL TO WORK IT IS CONSIDERED TO BE EQUAL. IF WE DO NOT SPEND IT
ON GOODS AND SERVICES THEN WE PUT IT IN THE BANK AND THEY LOAN IT OUT
TO OTHERS TO USE TO BUY GOODS AND SERVICES.
• We measure the economy by the earnings shown here or by the value of the
goods and services produced.
Thursday: This Unit begins the focus strictly
on Macro
• Be able to define Gross Domestic Product, along with what it is
comprised of, and what is not included in the GDP. Be able to list 3
ways that it is figured.
• Be able to verbalize the different components and be able to read
choices in order to match what is and what is not included in GDP.
• Do Now: with your shoulder partner make a list of all the groups that
can buy goods and services in the world. See if you can put them into
4 categories.
What is Macroeconomics?
Macroeconomics is the study of the large economy
as a whole. It is the study of the big picture.
•
•
Instead of analyzing one consumer, we analyze everyone.
Instead of one business we study all businesses.
Why study the whole economy?
• The field of macroeconomics was born during
the Great Depression.
• Government didn’t understand how to fix a
depressed economy with 25% unemployment.
• Macro was created to:
1. Measure the health of the whole economy.
2. Guide government policies to fix problems.
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For all countries there are three major
economic goals:
1. Promote Economic Growth
2. Limit Unemployment
3. Keep Prices Stable (Limit Inflation)
In this unit we will analyze how each
of these are measured.
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Goal #1
Promote Economic Growth
How does a country measure
economic growth?
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How do we know how well the economy is doing?
• Economists collect statistics on production, income,
investment, and savings.
• This is called national income accounting.
The most important measure of growth is GDP.
Gross Domestic Product (GDP) is the dollar value of all
final goods and services produced within a country’s
borders in one year.
• Dollar value- GDP is measured in dollars.
• Final Goods-GDP does not include the value of
intermediate goods. Intermediate goods are goods
used in the production of final goods and services.
• One Year-GDP measures annual economic
performance.
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What does GDP tell us?
Just like calculating your own income, GDP measures
how well the U.S. is doing financially.
How do you use GDP?
1. Compare to previous years (Is there growth?)
2. Compare policy changes (Did a new policy work?)
3. Compare to other countries (Are we better off?)
*CIA Factbook 2010 Estimate
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World GDP Distribution
2010 Nominal GDP
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Calculating GDP
Three Ways of calculating GDP:
1. Expenditures Approach-Add up all the
spending on final goods and services
produced in a given year. THE ONE USED
ON TEST
2. Value added- the value of sales minus the
value of the inputs.
3. Income Approach-Add up all the income
that resulted from selling all final goods and
services produced in a given year.
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IT MUST BE PRODUCED IN THE BORDERS
OF THAT COUNTRY TO BE PART OF THE
GDP
IF IT IS PRODUCED IN ANOTHER COUNTRY
BY A BUSINESS FROM THE COUNTRY
BEING COUNTED THEN IT IS PART OF THE
GROSS NATIONAL PRODUCT FOR THAT
COUNTRY AND PART OF THE GDP FOR THE
FOREIGN COUNTRY
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Expenditures Approach
Four components of GDP:
1. Consumer Spending
You
must
know
this
Ex: $5 Little Caesar's Pizza
2. Investments -When businesses put money back into their own
business.
Ex: Machinery or tools
3. Government Spending
Ex: Bombs or tanks, NOT social security or other transfer
payments
4. Net Exports -Exports (X) – Imports (M)
Ex: Value of 3 Ford Focuses minus 2 Hondas
GDP = C + I + G + Xn
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What is NOT included in GDP?
1. Intermediate Goods
• No Multiple Counting, Only Final Goods
• EX: Price of finished car, not the radio, tire, etc.
2. Nonproduction Transactions
•Financial Transactions (nothing produced)
•Ex: Stocks, bonds, Real estate
•Used Goods- anything not produced that year
•Ex: Old cars, used clothes
3. Non-Market (Illegal) Activities
•Ex: Illegal drugs, unpaid work, payment under the table
4. Government transfer payments- nothing produced that year
Ex:welfare payments, unemployment, social security payments
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Included or not Included in GDP?
For each situation, identify if it is included in GDP FOR THE
USA. Then identify the category C, I, G, or Xn
1. $10.00 for movie tickets
2. $5M Increase in defense expenditures
3. $45 for used economics textbook
4. Ford makes new $2M factory
5. $20K Toyota made in Mexico
6. $10K Profit from selling stocks
7. $15K car made in US, sold in Canada
8. $10K Tuition to attend college
9. $120 Social Security payment to Bob
10.Farmer purchases new $100K tractor
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Included or not Included in GDP?
GDP=$7,125,010
1. $10.00 for movie tickets
2. $5M Increase in defense expenditures
X $45 for used economics textbook
4. Ford makes new $2M factory
X $20K Toyota made in Mexico
X $10K Profit from selling stocks
7. $15K car made in US, sold in Canada
8. $10K Tuition to attend college
X $120 Social Security payment to Bob
10.Farmer purchases new $100K tractor
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FRIDAY
• Be able to discuss why GDP is not a complete picture of a
countries standard of living
• Listen to Robert Kennedy and discuss what you think.
• Do Now: List and share with your neighbor things you
think make the USA a great country, or why you don’t.
• EQ: What are important aspects not measured in GDP and
what about the negative things measured?
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2007 FRQ
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What are some problems with using GDP to
measure the nation’s standard of living?
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Video:
Robert Kennedy GDP Speech
https://www.youtube.com/watch?v
=77IdKFqXbUY
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• What were things that he pointed out that the GDP does not
measure?
• What is measured that makes the numbers go up but would
not really be considered a positive image for standard of
living?
• What would you measure for the standard of living?
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Why do some countries have higher GDPs than others?
Productivity
1. Economic System
Example#1: Capitalist countries have historically had more
economic growth.
–
–
Capital (like robots) can produce more than people
Countries with more capital, can produce more products than countries
without a lot of capital.
2. Property Rights
3. Capital
Ex: Capital stock is machinery, tools, and man-made resources.
Example#1: India has over a billion people (human resources)
but relatively few capital resources and therefore a lower
GDP than the U.S.
Example#2: Japan has few natural resources but a high GDP
4. Human Capital (Knowledge)
5. Natural Resources
Ex: Syria has a lower GDP because it is mostly desert.
• Complete the handout for practice on what is counted and
where it goes.
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