Bell Ringer 11-1-16 What is the term we use for the measure of economic growth? (Three words, first starts with G)

Inflation and The Economy

Lesson Frame We will- Analyze calculation and effects of inflation I will-Calculate Consumer Price Index and Inflation Rate

Gross Domestic Product (GDP) Measure how economy is doing How many products are made Durable and Non-durable goods Final goods Gross Domestic Product (GDP) Do Not Write Down

Intermediate goods- used in production of other goods “middle” of production Example ___________ GDP does not include Do Not Write Down

2. Used goods- already counted as final Black market goods Non-market activities Babysitting, mowing lawns 5. Imported goods 6. Financial assets- stocks, bonds GDP does not include Do Not Write Down

Aggregate Expenditures Model Calculate GDP GDP= C+I+G+NX C= Consumer goods I= Business and Invesment G= Government spending NX= Net Exports Aggregate Expenditures Model Do Not Write Down

Cost Push (Supply-side)- increase in per unit production costs Demand Pull- caused by excess spending beyond economy’s capacity to produce Cost Push (Supply-side)- increase in per unit production costs Kinds of Inflation

Measure of price change for goods and services between years Quantity of Goods and services= a “basket” Change between years is the inflation rate Consumer Price Index

CPI = (Cost of basket in year1/ Cost of basket in base year) * 100 Consumer Price Index

Calculating Inflation Inflation rate- percent % change in price level Deflation- decrease in price level Calculating Inflation

Required Reserve and CPI and inflation rate Worksheet Exit Ticket 11-1-16 Required Reserve and CPI and inflation rate Worksheet