Download Economic Indicators

Economic Indicators
1. If you put $200 into a savings account that had a 2% annual interest rate,
how much money would you have after 1 year?
a. $200
b. $202 c. $204
d. $208
2. Who or what backs the money that circulates throughout the country
now?a. Gold
b. Silver
c. The government d. The paper money itself
3. An ATM account and Checking account are examples of what?
a. Demand deposit b. Time Deposit c. FDIC
d. Barter
4. Who is most likely to make a decision that will affect MONETARY policy
and interest rates?
a. Congressmen
b. The President
c. A Mayor
d. The Fed
5. If there is too much money in circulation, the government should use a
____________ monetary policy because they will ______________
interest rates.
a. Tight, raise
b. Tight, lower
c. Loose, raise
d. Loose, lower
• UNIT 2 Review
____6. Which power of the legislative branch restricts the power of both the executive and
judicial branches?
•
a. taxation
b. financing the army and navy
c. impeachment
d. declaring war
____7. In what ways can the president influence the laws passed by Congress?
a. by suggesting laws to be passed by Congress
b. by appointing Supreme Court
judges
c. by saying what the law is
d. by passing new laws
____8. Which choice best summarizes the powers of the executive branch?
a. the executive branch reviews the laws to make sure they follow the constitution
b. the executive branch makes the laws and confirms federal appointments
c. the executive branch vetoes laws from Congress
d. the executive branch carries out the laws through the presidency and executive branch
departments
____9. Under Article III ,which branch has the power to declare laws unconstitutional?
a. Executive branch
b. Congress
c. Judicial branch
d. Legislative branch
____10. Which of the following best describes why Congress has two branches?
a. to check the power of the president
b. to give more power to the large states
c. to balance power between small and large states d. to pass laws more quickly
Goals
Identify the different parts of the business
cycle.
Determine what part of the business cycle a
nation is in based on different economic
indicators.
• What are some events that occur in cycles
(No! Not bicycles)
• Finish the statement: “what goes up, must
come __________.”
Economic Indicators
• Indicators help us tell how well an economy is doing.
They include…
– Unemployment: people who can work but are without
employment
– Inflation (CPI): the general increase in prices over time.
Inflation often occurs during expansion because
consumers have more $ to spend causing demand
to increase.
– PPI (producer price index): Used by producers to
see how much the goods/services they need for
their businesses will cost.
– Productivity/GDP: total of all the final
products produced in a country
– Stock Market (bull vs bear market): where
shares of corporations are bought and sold.
Employment
• Unemployment: measures the people
who can work but do not have jobs.
• Full Employment: when all people who
can work have jobs
• Underemployment: having a job which
you are overqualified and underpaid for.
– Ex: PhD. working at McDonalds
GDP: Gross Domestic Product
• Total value of all the final products that are
produced within a country in one year.
• Final products: a good sold to a user (as
opposed to all the ingredients of that
product). The car, but not the steel or the
rubber that went into making it
Per Capita GDP
• GDP divided by a country’s population
In other words: The GDP per person
Per Capita GDP
• GDP takes into account the Standard Of
Living-measure of quality of life, higher
GDP = higher standard of living.
The darker the blue, the better Per Capita
GDP. How’s the US doing?
CPI or the Consumer Price
Index
• Measures inflation rates
for the nation’s economy
– Inflation: the general
rise in price of an item
over time.
• Is determined by
measuring the price of a
standard group of goods
meant to represent the
“market basket” of a
typical consumer.
Market Basket might
include cost of….
•Food and drinks
•Medical care
•Housing
•transportation
How much do these cost?
In March
Then
again
in
May.
Market Basket might
include cost of….
•Food and drinks
•Medical care
•Housing
•transportation
The Stock Market
• Where shares of corporations are bought
and sold.
– Dividends: money earned by your share of a
stock
– Capital Gains: money earned when you sell
your stock
• Bull Market: Rising
• Bear Market: falling
Bear vs. Bull Market
• The Chicago Bears just
aren’t that good and often
FALL, just like a bear
market.
• When Michael Jordan was
on the Chicago Bulls, he
would always rise up to
dunk just like the rising
market.
The Business Cycle
Expansion
Peak
Contraction
Trough
Contraction (a.k.a. “Recession”)
• Economy is DECLINING
– Bear market
– GDP down
• Unemployment is RISING
Trough (a.k.a. “Depression”)
• Economy is at its LOWEST
– GDP at LOWEST
• Unemployment is at its HIGHEST
– EX: the Great Depression 1929-1939
Stock Market Crash Wall St.
1929, “Black Tuesday”
Run on the
banks! NO FDIC
The Great Depression
The Great Depression
1933: unemployment=25%
Today: unemployment =
8.6%
Expansion
• Economy is IMPROVING
– Bull market
– Inflation (CPI rises)
– GDP up
• Unemployment is FALLING
Peak (a.k.a. “Boom”)
• Economy is at its HIGHEST
– GDP is at its HIGHEST
• Unemployment at its LOWEST
EX: the dot com boom in the 1990s
The Business Cycle
___________
___________
___________
___________
Decide whether each scenario represents a Peak, Trough
(Depression), Contraction (Recession) or Expansion
• 1. America’s Dow Jones (stocks of the 30
largest American Companies) has fallen
for the 60th day in a row. Unemployment
rose from 5% to 7% from January to
May. The GDP declined for the 5th
consecutive month this year. What part of
the business cycle is America
in?____________________
Decide whether each scenario represents a Peak, Trough
(Depression), Contraction (Recession) or Expansion
• 2. Russia’s stock market crashes. The value of
the Russian Ruble (Russia’s currency) sinks to its
lowest level in a decade. Millions of Russians find
themselves unemployed as the unemployment
rate rises to 25%. The price of necessary goods
skyrockets and thousands of Russians starve,
unable to afford bread.
• What part of the business cycle is Russia
in?____________________
Decide whether each scenario represents a Peak, Trough
(Depression), Contraction (Recession) or Expansion
• 3. China’s stock market has been on the rise
for 2 straight years. Chinese productivity has
increased steadily each year as countries
around the world buy more and more cheap
Chinese goods. China’s GDP reached its
highest point. China’s unemployment rate has
steadily declined for the past 10 years in a
row. Today it is at its lowest rate ever (4.2%).
The price of Chinese goods has declined
making them affordable to the majority of
Chinese people.
• What part of the business cycle is China
in?____________________
Decide whether each scenario represents a Peak, Trough
(Depression), Contraction (Recession) or Expansion
• 4. After a recession the French economy has
been on the rise. French productivity has risen a
little each year. France’s unemployment rate has
steadily declined by .5% from January to May.
France’s GDP was up for the second month
in a row.
• What part of the business cycle is France
in?____________________
Business Cycle Art
• Fold your paper into quadrants
• Label each quadrant one part of the
business cycle.
• Draw the Business cycle
• Include information about what happens in
each part.
The Business Cycle
Peak
•Economy is at its
HIGHEST
•Unemployment at its
LOWEST
Expansion
•Economy is at its LOWEST
•Unemployment is at its
HIGHEST
Contraction
Trough
1. The U.S. Bureau of Labor Statistics
annually produces the consumer price
index (CPI), which measures average
price changes in relation to prices in a
chosen base year. What is the CPI most
likely measuring?
a. inflation and deflation
b. imports and exports
c. employment and unemployment
d. inputs and outputs
• 2. In the business cycle, recessions,
downturns, downswings, and
liquidations are also known as
a.
b.
c.
d.
Inflation
contractions
Prosperity
expansions
• 3. What is another term for expansion
in the business cycle?
a.
b.
c.
d.
Downturn
Recovery
Trough
Surplus
• 4. The steady rise in prices measured
by an index of the cost of various
goods and services is known as
a. GDP
b. Per capita GDP
c. Inflation
d. Deflation
5. Which term describes the total value of
goods and services produced in a country
in a given year?
a. GDP
b. CPI
c. Debt
d. Recession
6. What historical event is an example of an
economic trough in the United States
a. Rockefeller’s Oil
b. Great Depression
c. Cotton Gin
d. Creation of the UN
7. Which term is used to describe the
inability to find employment by workers
who are able and willing to work?
a. Underemployment
b. Full employment
c. Unemployment
d. GDP
FINAL EXIT TICKET QUIZ
1. DRAW THE SNAKE GRAPH BELOW
2. LABEL “EXPANSION” “RECESSION” “TROUGH” AND
“BOOM”
3. AT EACH PLACE, EXPLAIN HOW GDP IS DOING
4, AT EACH PLACE EXPLAIN HOW UNEMPLOYMENT IS
DOING