GDP, CPI, Unemployment and a bunch of numbers Economics 2012-2013 MHS Mr. Burdette

GDP Gross Domestic Product Measures the value of all the “stuff” we produce Measure of how productive a country is

Consumer Consumption Goods and services purchased by people in households for personal use

Business Investment Capital goods, buildings, machinery. Goods produced but not yet sold

Government Purchases Not transfer payments (welfare or social security) Only purchases that increase productivity

Net Exports Balance of trade More exports than imports = positive number More imports than exports = negative number

Who’s number 1? By far, United States out produces all other countries. The European Union has a higher GDP Made up of 27 countries

The Rankings! http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

Not the full story! http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

What makes up our GDP? Consumer Consumption is the largest portion by far United State’s consumes more goods (per capita) than any other country Our businesses are free to invest and our markets are relatively open (closing quickly) Government invests (not always intelligently) Our high consumption also leads to negative exports (highly imbalanced trade)

Unemployment BLS measurement of percentage unemployed in the United States Useful tool to look at the health of the economy

Misleading numbers How can unemployment be misleading Does not count people not looking for work Doesn’t count the “partially employed” or under employed Fluctuates largely by season (holiday shopping?)

CPI Consumer Price Index Measures inflation Takes a basket of goodies and determines the prices Historically, U.S. prices have been rising