Transcript 59-65_Economic_Performance--World

Business Cycle
59
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Gross Domestic Product
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Effects of Inflation
Source: http://www.davidgothard.com/edi/images/inflation.jpg
The Business cycle can be traced back over the last
century to see many periods of ups and downs.
GDP data is examined to
determine growth from
year to year.
The ups and downs of the
business cycle can affect the
public’s opinion of a
President’s performance.
The business cycle goes through periods of
expansions, peaks, contractions, and troughs.
GDP data is also used to
compare economic growth
over long periods of time.
Inflation, or the rise of
prices, has the effect of
cutting purchasing power.
Government Spending
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Taxation Policies
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Interest Rates
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The gov’t controls the
interest rates in order to
control the rate of growth
in the economy.
Monetary policy is how
the government controls
the amount of money in
circulation.
FDR used higher government
spending to try and end the
Great Depression.
President Reagan in the early
1980 pushed for tax cuts in
order to put more money into
investments and business.
Sometimes the efforts of
the Federal Reserve is
not enough to get the
economy to respond.
The Federal Reserve tries
to make corrections to the
interest rate in small
increments.
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The economy responds to
influxes of money---more
money means a rising economy.
Mergers / Trusts
Business
#1
61
Larger
Business
Business
#2
Labor Unions
Logo of the United Auto Workers
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Bargaining Tools
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The overall goal of a
labor union is to improve
the conditions for its
members.
The government still
regulates the role of
monopolies in the
economy.
A merger is when two or
more companies join
together to become one.
Both workers and employers use many tactics to
achieve their goals. However many of these
tactics are nor in the best interest of both
groups.
One major concern of
One major point of
workers in the economy are contention between owners
the conditions in which they and workers is the wages
they receive.
work.
One tactic used by labor
unions is to strike against
their employers.
Income Tax
62
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Sales Tax
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Other Revenue Sources
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The problem of overspending
is often a difficult opponent
for government leaders.
Personal Income tax
returns are due to the IRS
by April 15th every year.
Excise taxes are special
taxes placed on certain
products like gas, alcohol,
and cigarettes.
Many citizens are against
increased taxes no matter
reason .
One regressive tax is the sales
One way of increasing
tax many forms of government
government revenue in
charge. It is an easy tax to
recent years has been the
collect.
formation of state lotteries.
One criticism of the tax system
is the idea of how much tax
should be levied against
citizens.
Progressive taxes such as the
income tax require those who
make more to pay a greater
percentage.
Drafting Budgets
63
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Expenditures
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Balancing Budgets
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The budget deficits of
the last twenty years
have built a large public
debt.
Many times the only way
to be rid of deficits is
to increase taxes or cut
services.
“pork barrel” projects
are often blamed for
the deficit spending.
Although the budget
process requires tough
decisions, no one wants it
to affect their interests.
One suggested solution to
the deficit problem has
This cartoon refers to the
been a balanced budget
small surplus in the late
amendment to the
1990’s that encouraged more
Constitution.
federal spending.
The federal budget is
dominated by government
benefits paid to individuals
The process of designing a
budget can be a year long
process.
Banking Services
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Stocks, Bonds, Mutual Funds
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Consumer Credit
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Traditional banks provide
financial services while
making a profit from
interest charges and fees.
The New York Stock
Exchange is the place
where corporations have
their share sold on the
open market.
Consumers have a credit
report that shows their
history of paying debts.
The Federal Depositors
One of the major services
Insurance Corporation (FDIC)
provided by banks is
insures that one’s money is safe
checking accounts or
in a financial institution.
debit accounts.
The level of one’s education Too much debt can lead
has a great impact upon
a person to bankruptcy
earning potential.
and a bad credit rating.
The overuse of credit cards
leads many people into
financial difficulties.
U.S. Balance of Trade
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United Nations
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War on Terrorism
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One of the major topics in world politics in the
modern era is the activities of terrorists. Many
of these terrorists operate in nations where the
government supports their activities.
The NAFTA agreement
created a new free trade
zone in North America.
The major role of the
United Nations is to keep
world peace and prevent
conflict.
A trade deficit is when a nation imports more than
it exports causing more money to leave then nation
that enter through trade.