Introduction to Business Chapter 4 Economic Measurements Essential Question: How do we measure the economy?

Standards Addressed: 1.1 Business Communications (C): Students will understand communications as applied to personal and professional situations. They will demonstrate competency by selecting and using appropriate forms of communications in a variety of situations. 1.1.7 Systems–use systems thinking to discuss the impact of cultural, organizational, technological and behavioral characteristics on the selection of communication strategies and methods. 1.4 Economics and Financial Concepts (C): Students will understand the impact of global and domestic businesses, financial concepts, and integrated business models. They will demonstrate competency by using appropriate technology and other resources to solve business problems. 1.4.3 Economic Culture–explain how culture affects economic practice and business ethics 1.4.4 Economic Systems–describe a variety of economic systems

Chapter Objectives: Explain how Gross Domestic Product (GDP), GDP per capita, and labor productivity are used as measures of economic performance. Describe the four phases of the business cycle. Define inflation and deflation.

Measuring economic growth. p. 41 We measure our economic performance by calculating: our gross domestic product, our per capita output, and labor productivity. We measure the difference in periods by comparing subsequent periods to a base period. A base year or period is the year or period chosen to compare an item, such as price, to the same item in another year or period.

The business cycle p.44 A business cycle has four important phases: prosperity, recession, depression, and recovery. Prosperity is a phase in the business cycle when most people who want to work are working and businesses produce goods and services in record numbers. Recession is a period where demand begins to decrease, business lower production of goods and services, unemployment begins to rise, and GDP growth slows for several quarters. Depression is a phase marked by high unemployment, weak sales of goods and services, and business failures. Recovery is a phase in the business cycle in which unemployment begins to decrease, demand for goods and services increases, and GDP begins to rise again.

The business cycle (continued) p.44

Inflation and deflation p. 45. Inflation is a general rise in the level of prices Over time, as the cost of goods and services increase, the value of a dollar falls, causing a consumer to be able to purchase less with the same number of dollars as he/she previously could. Deflation is a general decrease in the level of prices Over time, as the cost of goods and services decrease, the value of a dollar rises, causing a consumer to be able to purchase more with the same number of dollars as he/she previously could. There is however a downside to this, as deflation is initiated and continues, personal and investment purchases are reduced, businesses attempt to reduce costs and unemployment rises.

Our economic future p. 46. There are some exciting possibilities for the future of our economy as we solve economic problems and use new technology to increase output.

Assignments Do Now Thursday--Calculate Business Data p. 50 #32 Friday--Calculate Business Data p. 50 #35 Read example and calculate answer in an Excel spreadsheet, show your work. Give a short explanation as to your answers. Workshop Discussion Communicate Business Concepts questions 13-18 p. 48. Discuss questions with your group and write a brief answer to questions

Homework Define Key Terms Develop your Business Language p. 49. Answer Review your reading questions 1-12 p.48. The Resume Handbook for High School Students. www.intro2business.swep.com