Transcript Business Cycles ppt

Congrats to the Bay Area!
• The FDA and hundreds of
other health professionals
have issued McDonalds Corp.
a public letter requesting that
McDonald’s stop marketing
Happy Meals to young
children
• San Francisco already has a
city ordinance regarding
minimum health requirements
for meals that include toys
• We hope that the rest of the
country will follow in its
footsteps by the year 2016
Business Cycles
Warm Up #2
1. What are the 4 categories of spending
that make up our GDP (by expenditure)?
2. How does the GDP of a country relate to
its standard of living?
Review
• Real GDP- GDP reported in the price levels for
the year in which GDP was measured
• Nominal GDP- GDP that takes into account
inflation and current value of goods
GDP vs GNP
• Gross Domestic Product- value of all goods
produced WITHIN the US
• Gross National Product- value of all goods
made by US countries
• There are 2
phases:
Business Cycle
– Expansion
• New technology
• Post-War industry
– Recessions
• Unemployment
• Drop in stocks
• Higher interest
rates
Draw and Label the Business Cycle
• The Business Cycle by Khan Academy
Growing too fast too quickly can be
a bad thing
• When the GDP
soars at a really
fast pace,
economists worry
about a “bursting
bubble”
• Slow and steady
wins the race
Recession and Depression
• Recession- when GDP
falls for 6 consecutive
months
• Depression- when
GDP falls for over 12
consecutive months
Aggregate supply and demand
• Aggregate output is real GDP- total amount of
goods and services calculating inflation and
new census information
• Aggregate supply refers to the total amount
that all U.S. producers are willing and able to
produce
• Aggregate demand refers to how people
respond to price levels
Per capita GDP
• Per capita GDP is the GDP per household
• Currently $42,000 (roughly)
• Best measure of the US Standard of Living
Begin Homework
• Reteaching Activity 12-2: Business Cycles