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CONTENT/TEACHING OUTLINE
COMPETENCY:
3.00
Understand economic principles and concepts fundamental
to marketing.
OBJECTIVE:
3.03
Explain economic measurements and the business
(economic) cycle.
A. Summarize economic measurements.
1. Labor productivity: The amount produced per worker measured during a specific
time period. Training workers or providing incentives can increase productivity.
If workers are more productive, a company’s profits can increase. For example,
training employees to perform a specific task such as packaging computers in a
box can allow the worker to complete this one task more efficiently than if the
worker had several different responsibilities.
2. Gross domestic product (GDP): A measure of the goods and services produced
IN a country.
3. Gross national product (GNP): The sum of the dollar value for products
produced BY a country. GNP is different from GDP because it includes the
dollar value for products produced by U.S. citizens and companies that are
abroad. For example, Briggs and Stratton (produce engines for lawn mowers)
have plants in the United States as well as Japan. The production of engines in
Japan is included in the GNP but not in the GDP.
4. Standard of living: The amount of goods and services that a nation’s people
have. For example, the standard of living in the United States is higher than the
standard of living in Ethiopia.
5. Inflation rate: The rate at which prices are rising. A stable economy has an
inflation rate of 1-5% per year. The government tries to control the inflation rate
by raising interest rates which discourages borrowing money.
6. Unemployment rate: The number of people who are willing and able to work but
cannot find a job. The unemployment rate can be determined by dividing the
number of unemployed workers by the total number of people who are able and
willing to work (including both employed and unemployed).
B. Compare phases of the business cycle.
1. Business cycle: The movement of an economy through four recurring phases –
expansion, recession, depression, and recovery. The business cycle may also
be called the economic cycle.
2. Expansion
a. Highest period of economic growth
b. Low unemployment
c. High production of goods and services
d. High consumer spending
3. Recession
a. Economic slowdown
b. Rise in unemployment
c. Production slows down
d. Decrease in consumer spending
4. Depression
Marketing
Summer 2006
62
CONTENT/TEACHING OUTLINE
COMPETENCY:
3.00
Understand economic principles and concepts fundamental
to marketing.
OBJECTIVE:
3.03
Explain economic measurements and the business
(economic) cycle.
a. Prolonged recession
b. High unemployment
c. Drastic decrease in production of products
d. Extremely low consumer spending
e. Poverty can result
5. Recovery
a. Renewed economic growth
b. Increase in employment
c. Increase in production of goods and services
d. Increase in consumer spending
e. Moderate business expansion
Marketing
Summer 2006
63
CONTENT/TEACHING OUTLINE
COMPETENCY:
3.00
Understand economic principles and concepts fundamental
to marketing.
OBJECTIVE:
3.03
Explain economic measurements and the business
(economic) cycle.
Teacher Resources
Activity 1
Have students complete the word search and fill-in-the-blank activity on Economic
Measurements and the Business Cycle included in the Activities folder for this
competency.
Activity 2
Using the Internet, have students research the GDP and GNP for a country. Have them
explain the difference in the numbers.
Activity 3
On a white sheet of paper, have students draw the business cycle. Divide the cycle into
the four phases. Label each phase. Draw pictures in each section that represent the
characteristic of that section.
Other Resources
3.03 PowerPoint Presentation
Marketing
Summer 2006
64