Transcript Economic Activity in a Changing World

Economic Activity in
a Changing World
Ms. Smith
Historical Economic Systems…
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Over time, 4 types of economies in the United States
have been identified:
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Agricultural: Over 200 years ago, during the Colonial Era. People
lived off the land and were primarily farmers.
Service: Rooted in the Colonial Era as well. Early colonists together
to barter for necessary services.
Industrial: Rooted in the mid-1800’s, during the Industrial
Revolution. When society relied more on machinery to produce goods.
Information: Mid-1900s. Internet became an integral part of doing
business.
Partner Activity!!!
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With a partner, brainstorm the next economic era.
Once you and your partner come up with the new era
and a name for your new era, you will create a poster
illustrating:
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Name of your new era
Pictures exhibiting characteristics of your new era
4-5 sentence explanation on the back of your poster describing your new
era and rationale for why you believe this will be the next economic era
Be sure to color your poster in order to receive credit
Measuring Economic Activity
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The wealth of nations rises and falls through periods of
war, recession, and prosperity, however, “those who
cannot remember the past are condemned to repeat it”.
Economic Indicators: measure things like how much a
country is producing, whether its economy is growing,
and how it compares to other countries.
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Gross Domestic Product
Unemployment Rate
Rate of Inflation
National Debt
Gross Domestic Product (GDP)
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GDP: the total value of the goods and services
produced in a country in a given year.
Includes 4 main areas:
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Consumer
Business
Government
Goods and services sold to other countries
*Doesn’t include goods & services not reported to the government
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Standard of Living: the amount of goods and services the
average citizen can buy.
Unemployment Rate
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Measures the number of people who are able to work
but don’t have a job during a given period of time.
There are 2 types of unemployment:
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Temporary:
 Quit job
 Just graduated from school
Seasonal:
 Landscaper
Rate of Inflation
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Inflation: a general increase in the cost of
goods and services.
Ex.) High productivity
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Hyperinflation
Deflation: general decrease in the cost of
goods and services.
Ex.) High productivity, low demand.
National Debt
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Countries can run up large debts.
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Budget Deficit: when the government spends
more on programs than it collects in taxes.
Budget Surplus: when a government’s revenue
exceeds its expenditures during a one-year period.
National Debt: the total amount of money a
government owes.
Group Activity!!!
Get into “families” of 4.
Once in your families, you must develop a shopping list for
your family to sustain the week, containing at least 5 items.
Look up prices for those items for the following years:
1.
2.
3.
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2010
1980
1950
1920
Make a bar graph comparing the 4 time periods.
On the back of your poster, explain what you see in
relation to inflation, deflation, hyperinflation, etc.
4.
5.
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Your explanation MUST be no shorter than 6 sentences!
Due at the end of the class period…
The Business Cycle
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The rise and fall of economic activity over time; where
slumps in the economy are always followed by a wave
of productivity.
There are 4 stages…
Prosperity
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The peak of economic
activity.
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Unemployment is low, production
of goods and services is high, and
new businesses open.
Wages are usually higher so there
is greater demand for goods to be
produced.
More houses are being built
because more people can buy
houses.
 Ex.) 1990’s the U.S. because
of low inflation and the
Internet.
Recession
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The economic slow down.
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Spending decreases and so does
demand for products.
Businesses produce less so they
need fewer workers.
 Unemployment rate then
increases so people have less
to spend.
There is a general drop in the total
production of goods and services.
 GDP declines
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Ripple effect
Depression
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A deep recession that affects the entire economy and lasts
for several years.
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There is high unemployment and low production of goods and services.
Can be limited to one country, but usually spreads to other countries as
well.
The state of the economy is affected by large numbers of people out of
work and a lot of shortages.
 Ex.) Stock market crash of 1929 a.k.a. “Black Tuesday”
Recovery
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Rise in business activity after a recession or depression.
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Production starts to increase.
People start going back to work and have money to spend again.
The new demand for goods and services stimulates more production and
the GDP grows.
Recovery leads to prosperity as new businesses open.
The Business Cycle
Prosperity
Recovery
Recession
Depression
Group Activity Time!!!
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2.
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Get into a group of 2-3 students.
Once in your groups, you are to
choose an event, business, sports
team, etc. that has seen the 4 stages of
the business cycle.
Then, brainstorm 10 points- relating
to the event- for each of the 4 stages
in the cycle.
Create a poster depicting this
information along the business cycle.
Include pictures at each of the stages,
demonstrating the connection to the
business cycle.