Transcript 1209644Chapter 23.2

Measuring the Economy
23.2
Rate yourself!
• You will rate yourself according to the homework
rubric for EACH poster!
• At the end you will give yourself and OVERALL
rating for the assignment.
– Do this on the back in a blank box next to your
name!
• Remember: in order to get a 4 it must be ALL
the same information I have and in your own
words. If you missed something you have to
rate yourself a 2!
Economic Growth
• Growth is good for everyone!
• When the economy is growing more
people have jobs, businesses produce
more, we have more goods and service
and money to purchase them with.
2008
Real GDP
2009
20 cars x $1,000 =
20 cars x $2,000 =
GDP $20,000
GDP $40,000
• Real GDP shows an economy’s production by taking out
prices. This helps to see if we really made more.
• When Real GDP goes up the economy is growing!
• When Real GDP goes down the economy is declining
(getting worse)!
Business Cycle
• The economy grows over time, but not at a constant
rate.
• The ups and downs of the economy are called the
business cycle.
• Goods time and bad times won’t last forever so
plan!
Expansions
• This is when Real GDP
goes up. The economy is
getting better!
• This is a time when the
economy is growing by a
little or a lot it doesn’t
matter.
• An expansion is longer
than a recession. Thank
goodness!
Recession
• This is when Real GDP
goes down for 6 months
or more. The economy is
getting worse!
• A recession is shorter
than expansion.
• If it becomes severe
then it is a depression.
Unemployment
• Civilian labor force is everyone
over the age of 16 that is
working or looking for work.
• Unemployment Rate is the
percent of people who are not
working but are looking for
work.
• When unemployment rate drops
the economy grows! We want
LOW unemployment.
• High unemployment=recession
• Low unemployment=expansion
• Fiscal policy are the
changes in taxes and
government spending.
Fiscal Policy
• Political differences often
prevent effective use of
fiscal policy.
• What if they increase
taxes?
– We have less money to spend
might equal recession
• What if the decrease
taxes?
– We have more money to
spend might equal expansion?
• Inflation is the constant
increase in the prices of goods
and services.
Price Stability
• As inflation increases, your
money will buy you less. What you
could buy for $1 last month is
now $1.50!
• Consumer Price Index is a
popular measure of the price
levels of 400 commonly used
products. (like toilet paper!)
• Stable prices/no
inflation=expansion
• Unstable prices/inflation=
recession
Overall Growth
EVERYONE write this in one of your BLANK
boxes!!!
• To experience growth we need:
– Real GDP to increase
– Lower unemployment rates
– Stable prices without inflation
– Government fiscal policy to help the market
continue to grow
– Confidence in the market
–If these happen we will reach a
period of expansion
NOW WORK ON TEST
REVIEW AND VOCAB!!!
• Vocab 23.1, 23.2, 26.1, 26.2
• Test study guide