Economics Honors: UNIT 4 Chapters 12 & 13 and sorta 15 and 16 ECONOMIC GROWTH & ECONOMIC CHALLENGES And kinda the government

What is the difference between microeconomics and macroeconomics??? MicroMacro

Gross Domestic Product Questions Read Section 1 in Chapter 12 What is gross domestic product (GDP)? How is GDP calculated? What is the difference between nominal and real GDP? What are the limitations of GDP measurements? What are other measures of income and output? What factors influence GDP?

Aggregate Supply and Aggregate Demand 1.What does it mean? 2.Why is the AS curve shaped the way it is? 3.What happens if AD shifts?

Chapter 12: Section 2: Let’s remember Mr. U’s Business Cycle…..

The Book’s Business Cycle EXPANSION- PEAK- CONTRACTION- TROUGH-

What Keeps the Business Cycle Going? Business cycles are affected by four main economic variables:

I NEED EXAMPLES OF THE FOUR VARIABLES… NOW SUCKA!!!!!!!!!!!!!!

Forecasting Business Cycles Economists try to forecast, or predict, changes in the business cycle.Economists try to forecast, or predict, changes in the business cycle. Leading indicators are key economic variables economists use to predict a new phase of a business cycle.Leading indicators are key economic variables economists use to predict a new phase of a business cycle. Examples of leading indicators are stock market performance, interest rates, and new home sales.Examples of leading indicators are stock market performance, interest rates, and new home sales.

Leading indicators Explain how each is a leading indicator of economic contraction or growth: market performancemarket performance interest ratesinterest rates new home sales.new home sales.

Chapter 12 Section 3 Group Activity: Measuring Economic Growth There are many ways to determine whether an economy is growing or contracting. In groups explain and illustrate how each of the following can cause economies to grow and contract: *Capital Deepening*Saving/Investing *Population*Government *Trade*Technological Progress

UNIT IV: Part II Chapter 13: Economic Challenges CHALLENGE #1: UNEMPLOYMENT

“FUN UNEMPLOYMENT ACTIVITY” There are 4 major types of unemployment: Frictional Seasonal Structural Cyclical Each fourth of the class must DEFINE, STATE A CAUSE, STATE A SOLUTION for each type of unemployment

Types of Unemployment

The Unemployment Rate 1.How is it calculated # OF PEOPLE UNEMPLOYED # OF PEOPLE IN THE CIVILIAN WORKFORCE # OF PEOPLE IN THE CIVILIAN WORKFORCE 1.What is it? 2.How does unemployment differ from underemployment 2.How does unemployment differ from underemployment? w.bls.gov/

The Current Unemployment Rate

Group Activity Page 336 #’s 1-7 Page 351 #’s 1-2

CHALLENGE #2 INFLATION Section 2: Chapter 13

Tell me a story…… Get into groups and write a 1 paragraph story that explains what INFLATION is.

The Effects of Rising Prices Inflation is a general increase in prices.Inflation is a general increase in prices. Purchasing power, the ability to purchase goods and services, is decreased by rising prices.Purchasing power, the ability to purchase goods and services, is decreased by rising prices. Price level is the relative cost of goods and services in the entire economy at a given point in time.Price level is the relative cost of goods and services in the entire economy at a given point in time.

Price Indexes A price index is a measurement that shows how the average price of a standard group of goods changes over time. The consumer price index (CPI) is computed each month by the Bureau of Labor Statistics. The CPI is determined by measuring the price of a standard group of goods meant to represent the typical “market basket” of an urban consumer. Changes in the CPI from month to month help economists measure the economy’s inflation rate. The inflation rate is the percentage change in price level over time.

Use the information on page 340 to explain how you calculate the inflation rate using CPI Calculating Inflation Calculating the Inflation Rate

Types of Inflation Creeping Inflation Creeping inflation is inflation that remains low (1 to 3 percent) for a long time. Chronic Inflation Chronic inflation occurs when the inflation rate rises steadily from month to month over an extended period. Hyperinflation Hyperinflation is inflation that is growing out of control. Inflation rates may be as high as 100 or even 500 percent. Hyperinflation can sometimes lead to total economic collapse.

“Fun” Inflation Activity There are 3 major causes of inflation: The Quantity TheoryThe Quantity Theory Demand-PullDemand-Pull Cost PushCost Push There are also 3 major effects of inflation on: Purchasing PowerPurchasing Power IncomeIncome Interest ratesInterest rates Each sixth of the class must DEFINE and EXPLAIN 1

POVERTY AHHHHHHH HHHH!!! Complete Poverty Activity Section 3 Chapter 13

Why should YOU CARE about Poverty even if you are not POOR?????

Sorta Chapter 15 Macroeconomic Challenges = Government Involvement Fiscal PolicyMonetary Policy (Treasury) (Federal Reserve)

The Return of Cheesy Econ Videos FISCAL POLICY 1.GDP= C__________________ I________________ I________________ G_________________ G_________________ 2. The Federal Government can stimulate the economy by: 3.Should the Federal Government stimulate the macroeconomy?

Sorta Chapter 16 Monetary Policy What is the Federal Reserve? FRB: About the Fed FRB: About the Fed Why do you believe it is important to have a “national bank?”Why do you believe it is important to have a “national bank?” Watch the last cheesy Econ Film ever and answer this:Watch the last cheesy Econ Film ever and answer this: 1.What are the two major jobs of the Federal Reserve. 2.Based on the film do you believe inflation or unemployment is the larger economic challenge?

LAST ASSIGNMENT In a proper essay answer the following:In a proper essay answer the following: What is your political position on government involvement in the macroeconomy? You must explain at least 4 reasons why you feel the way you do. 40 points