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Business Foundations Chapter 3 Slide Show notes Name_______________________Per_______ Measuring Economic Activity _________ ___________ _____________ are used to measure the health and strength of the economy. Economic indicators measure things like how much a country is producing, whether its economy is growing, and how it compares to other countries. Gross Domestic Product (GDP) Economists include four main areas in calculating the GDP: • Consumer goods and services • Business goods and services • Government goods and services • Goods and services sold to other countries The __________ __ _________ is the amount of goods and services the average citizen can buy. (how well people live) Unemployment Rate The unemployment rate measures: There are different reasons for being unemployed, including: Changes in the unemployment rate show whether an economy is picking up or slowing down. Rate of Inflation ___________ is a general increase in the cost of goods and services. The_____________________(CPI) measures inflation. The CPI calculates what it costs the typical family of 4 to live. Inflation can happen when an economy actually becomes too productive. (grows to fast) This situation can spiral out of control and lead to _________________. ______________is a general decrease in the cost of goods and services. 2 National Debt When the government spends more on programs than it collects in taxes, the difference in the amount is called the ________________. National Debt The total amount of money a government owes is its ___________________. If a nation spends less than its income, it has a ____________________. The Business Cycle The rise and fall of economic activity over time is called the business cycle. The four phases of the business cycle are: 1. 2. 3. 4.