Transcript Unemployment Rate

Free Enterprise

Free Enterprise economy: businesses
allowed to operate with limited gov’t
involvement.
© nperskine 2012
– Raise funds to
support political
campaigns in an
attempt to
influence
candidates.
– Can bring about
changes that
benefit only its
members
instead of
society as a
whole.
 Ex) NRA,
Greenpeace,
etc.
 Interest
groups:
private
organizations
that try to
persuade public
officials to act
or vote
according to
group members’
interests.
© nperskine 2012
© nperskine 2012
American Poverty
Four-person family: $22,000
Single individual: $11,000
(2011).
Welfare: gov’t aid to the
poor. Gov’t is trying to
combat the reliance upon
welfare by many recipients
(i.e. those not looking for
jobs).
– Food stamps, subsidized
housing, and legal aid.
© nperskine 2012
Poverty in 2010 U.S. Census
USA: 15.1%
Texas: 18.5%
California: 22.6%
Check out your states’ poverty rate and median household income:
http://money.cnn.com/interactive/news/economy/median-poverty-income/?iid=EL
© nperskine 2012
Gov’t Programs for the Poor,
Elderly, etc.
 Cash transfers: states
distribute federal $ to
the poor (entitlement
programs)
 Welfare recipients
 Average per household
$200 month
 *Regulations vary by
state
© nperskine 2012

•
Social Security:
direct cash transfers
to elderly (retirement
income) and disabled.
$25,392 max for single person per year
• 15% of income
-The problem: Too many
Baby Boomers, too few
workers to support
them.
© nperskine 2012

Medical:



Medicare: covers
Americans age 65 .
Medicaid: covers some
poor people who are either
unemployed or not insured.
Education: provided by
gov’t for all citizens,
including poor.

Funds programs from
preschool to college.

Financial Aid, Affirmative
Action, NCLB,
Standardized testing,
Basic Aid, etc.
© nperskine 2012
Public Goods Provided by Gov’t

Federal gov’t provides many
goods and services that the
public can’t fund on their
own.


Roads, parks, schools, military,
etc.
How does the gov’t gather funds
for these public goods?

Taxation and borrowing
© nperskine 2012

Externalities: an economic side effect that
affects those who are not directly involved
with the good or service.
 Positive
externalities: benefits those who
do not pay for the goods/services.
 Ex)
A college degree
- Education benefits not only students, but society as a
whole because educated workers are generally more
productive.
 Negative
externalities: the unintended
costs of goods/services that people incur.
 Ex)
Automobiles
- Driving cars = pollution
© nperskine 2012
Inflation

Too much currency in
circulation
 Leads to dollar’s value
decreasing relative to other
currencies’ values.

CPI (Consumer Price Index):
measures changes in the price
level of consumer goods and
services purchased by
households.
© nperskine 2012
Gross Domestic Product

GDP: total value of
all goods/services
produced in an
economy.
• Economists follow a
country’s GDP to
predict business
cycles.
• This measures
economic growth
in a country.
Country
2012 (in
trillions)
—
European Union
$18.084
1
United States
$15.8
2
People’s Republic
of China
$7.2
3
Japan
$5.9
4
Germany
$3.5
5
France
$2.8
6
United Kingdom
$2.6
7
Brazil
$2.5
8
Italy
$2.2
9
Russia
$2.1
10
Canada
$1.8
—
© nperskine 2012
GDP cont’d
• Highest per
capita: 1. Qatar
2. Liechtenstein
3. Luxemburg
• 2010:
http://www.i
nfoplease.com
/world/countr
ies/highestgdp-percapita.html
© nperskine 2012

Business cycles are fluctuations in
between expansion and contraction
(decline).
• These cycles are important because if
the economy doesn’t have enough jobs,
high school grads have trouble finding
work.
• If prices rise while incomes stay the
same, our ability to buy what we need
declines.

Ex: Inflation 3% growth and income grows
only 2% in one year, your money loses real
value.
© nperskine 2012
Unemployment Rates



Economists would like
to see the
unemployment rate
between 4.5%-6%.
National rate: 10% in
2009 and 7.7% in 2012
Find your state’s
unemployment rate:
http://www.ncsl.org/issuesresearch/labor/2012-stateunemployment-rates.aspx
© nperskine 2012
Unemployment Rate



Unemployment is defined as those who are
part of the labor force and are actively
looking for a job.
When a person gives up on finding a job,
they are considered a “discouraged worker.”
When a person is working for a job that does
not meet his/her qualifications, he/she is
underemployed.
© nperskine 2012
Innovation

Technological progress allows U.S.
economy to operate efficiently and
increase GDP.

Also allows U.S. businesses competitive
advantage in world economy.

Ex) Thomas Edison’s invention of the light bulb in
1879 made possible a longer workday.
© nperskine 2012
Gov’t supports and funds
innovation

Funds projects and research at
universities, government firms,
and private firms.
MIT, Texas A&M
 NASA

© nperskine 2012
Patents and Copyrights
• Patents: gives the inventor of a new product the
exclusive right to produce and sell it for 20 years.
• Copyrights: grants authors exclusive rights to publish
and sell his or her creative rights.
Trademarks: any word,
name, symbol, device, or any
combination, used to
identify/distinguish the
goods/services of one seller
or provider from those of
others, and to indicate the
source of the goods/services.
© nperskine 2012