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Introduction to Business
Chapter 4 Economic Measurements
Essential Question: How do we measure the
economy?
Standards Addressed:
1.1 Business Communications (C): Students will understand
communications as applied to personal and professional
situations. They will demonstrate competency by selecting
and using appropriate forms of communications in a variety of
situations.
1.1.7 Systems–use systems thinking to discuss the impact of
cultural, organizational, technological and behavioral
characteristics on the selection of communication strategies
and methods.
1.4 Economics and Financial Concepts (C): Students will
understand the impact of global and domestic businesses,
financial concepts, and integrated business models. They will
demonstrate competency by using appropriate technology and
other resources to solve business problems.
1.4.3 Economic Culture–explain how culture affects economic
practice and business ethics
1.4.4 Economic Systems–describe a variety of economic systems
Chapter Objectives:



Explain how Gross Domestic Product
(GDP), GDP per capita, and labor
productivity are used as measures of
economic performance.
Describe the four phases of the
business cycle.
Define inflation and deflation.
Measuring economic growth.
p. 41
 We measure our economic performance by
calculating:
 our gross domestic product,
 our per capita output,
 and labor productivity.
 We measure the difference in periods by
comparing subsequent periods to a base
period.
 A base year or period is the year or period
chosen to compare an item, such as price, to
the same item in another year or period.
The business cycle
p.44
 A business cycle has four important phases:
prosperity, recession, depression, and
recovery.
 Prosperity is a phase in the business cycle when most
people who want to work are working and businesses
produce goods and services in record numbers.
 Recession is a period where demand begins to decrease,
business lower production of goods and services,
unemployment begins to rise, and GDP growth slows for
several quarters.
 Depression is a phase marked by high unemployment,
weak sales of goods and services, and business failures.
 Recovery is a phase in the business cycle in which
unemployment begins to decrease, demand for goods and
services increases, and GDP begins to rise again.
The business cycle
(continued) p.44
Inflation and deflation
p. 45.
 Inflation is a general rise in the level of prices
 Over time, as the cost of goods and services increase,
the value of a dollar falls, causing a consumer to be able
to purchase less with the same number of dollars as
he/she previously could.
 Deflation is a general decrease in the level of prices
 Over time, as the cost of goods and services decrease,
the value of a dollar rises, causing a consumer to be
able to purchase more with the same number of dollars
as he/she previously could. There is however a
downside to this, as deflation is initiated and continues,
personal and investment purchases are reduced,
businesses attempt to reduce costs and unemployment
rises.
Our economic future
p. 46.
There are some exciting
possibilities for the future of our
economy as we solve economic
problems and use new technology
to increase output.
Assignments
 Do Now



Thursday--Calculate
Business Data p. 50
#32
Friday--Calculate
Business Data p. 50
#35
Read example and
calculate answer in an
Excel spreadsheet,
show your work. Give a
short explanation as to
your answers.
 Workshop Discussion
Communicate
Business
Concepts
questions 13-18
p. 48.
 Discuss questions
with your group
and write a brief
answer to
questions

Homework
 Define Key Terms Develop your Business
Language p. 49.
 Answer Review your reading questions 1-12
p.48.
 The Resume Handbook for High School
Students.
 www.intro2business.swep.com