Transcript Economics Unit 4 Business Cycle

Business Cycle
Unit 4 Macroeconomics
By the end
of this lesson
you should
know….
Terms
•
•
•
•
•
•
•
Peak
Trough
Recession
Depression
Expansion
Contraction
Business Cycle
Essential Questions
•
How are unemployment, inflation and economic growth
illustrated in the business cycle?
Georgia Performance Standard
SSEMA1 The student will illustrate the means by which economic
activity is measured.
a. Explain that overall levels of income, employment, and prices are
determined by the spending and production decisions of households,
businesses, government, and net exports.
e. Define the stages of the business cycle, as well as recession and
depression.
f. Describe the difference between the national debt and government deficits.
Literacy Standards
RH.11-12.2 Determine the central ideas or information of a primary or secondary
source; provide an accurate summary that makes clear the relationships among the
key details and ideas
RH.11-12.3 Evaluate various explanations for actions or events and determine which
explanation best accords with textual evidence, acknowledging where the text leaves
matters uncertain
WHST.11-12.9 Draw evidence from informational texts to support analysis, reflection,
and research.
What is the business cycle?
The business cycle is a graphic representation of
the ups and downs of the economy.
Peak
Peak
What is the business cycle?
Economists use data from Gross Domestic
Product and plot points on a graph to create the
Business Cycle. The business cycle is divided
into four phases
Peak
Contraction
Trough
Expansion
The Phases of the Business Cycle
• Peak- at this point Real
GDP stops increasing
• Contraction- this is a
period where Real
GDP in getting smaller.
– Contraction that lasts for
more than two quarters
is called a recession
• A particularly long and
severe recession is
called a depression
Peak
The Phases of the Business Cycle
• Trough- this is the
point where the
contraction period
has ended and the
economy is at its
lowest point
• Expansion- during
this period the
economy is
experiencing growth
Trough
How are employment and prices
connected?
Quick Write
Think about what it means with real GDP
changes. Explain what would happen with
unemployment and prices at each stage of the
business cycle.
• Peak
• Contraction
• Trough
• Expansion
How are employment and prices
connected?
•
Peak- unemployment is
at its lowest, prices are
at their highest
•
Contraction- decreasing
prices, increasing
unemployment
•
Trough- unemployment
is at its highest, prices
are at their lowest
•
Expansion- increasing
prices, decreasing
unemployment
Can you identify and describe each
phase?
Where are we today?
Class Discussion
Based on this data, determine where you think
we are in the business cycle today.
US Inflation Calculator
http://www.usinflationcalculator.com/inflation
/current-inflation-rates/
US Bureau of Labor Statistics
http://www.bls.gov/news.release/pdf/empsit.
pdf
Now you
should be
able to…
Define these
Terms
•
•
•
•
•
•
•
Peak
Trough
Recession
Depression
Expansion
Contraction
Business Cycle
Answer these Questions
•
How are unemployment, inflation and economic growth
illustrated in the business cycle?
Perform these Standards
• Illustrate the means by which economic activity is
measured.
• Explain that overall levels of income, employment, and
prices are determined by the spending and production
decisions of households, businesses, government, and
net exports.
• Define the stages of the business cycle, as well as
recession and depression.
Sample Questions
1.
Over a two-year period, the
nation of Parthia experiences a
steep decline in unemployment
rate, a rise in real GDP, and a
stabilized price level. Parthia
appears to be
A.
at the start of a recession
B.
in the middle of a depression
C.
stagnating economically
D.
in the middle of a boom period
2.
What would you conclude about
an economy characterized by
increasing real gross domestic
product (GDP), low
unemployment, and increasing
inflationary pressures?
A.
This economy is in a slowdown.
B.
The government needs to
address the unemployment
problem.
C.
This economy is in the
expansion phase of a business
cycle.
D.
The Federal Reserve should
expand the money supply.
Answer Key
1. D
2. C
Resources
• US Bureau of Labor Statistics News Release July 2012
http://www.bls.gov/news.release/pdf/empsit.pdf
• US Inflation Calculator
http://www.usinflationcalculator.com/inflation/currentinflation-rates/
• Economics Help
http://www.economicshelp.org/blog/4689/economics/ukeconomy-2012-forecasts/
• Georgia Department of Education’s
Economics/Business/Free Enterprise EOC Assessment
Guide
– http://www.gadoe.org/Curriculum-Instruction-andAssessment/Assessment/Documents/Milestones/Assess
ment%20Guides/GM%20Economics%20EOC%20Assess
ment%20Guide%20081715.pdf
Resources
• Economics GPS Frameworks: Unit 4- “The
Government and the Economy: Superhero or
Villain”
https://www.georgiastandards.org/Frameworks/
GSO%20Frameworks/Economics%20Unit%204.
pdf
• Georgia Department of Education Released
EOCT’s and answer keys
http://www.doe.k12.ga.us/Curriculum-Instructionand-Assessment/Assessment/Pages/EOCTReleased-Tests.aspx