Economics.

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Presentation transcript:

Economics

Why are companies in business? - to make money How do companies know how much money they need? - budgets budget – estimates of income and expenses

Raising Company Money: 1. sales 2. equity financing - selling stock 3. debt financing - acquiring loans

How do companies manage their money? - accounting accounting – process of maintaining financial records

Financial Records: - manage and control the company’s money - measure financial health of the company Financial health of businesses has a large effect on: - economics

- the part of something that relates to money Economics - the science concerned with the process or system by which goods and services are produced, sold, and bought - the part of something that relates to money www.merriam-webster.com

Historically, what has been the relationship between production and a countries economy? - high production makes for a strong economy and country - poor production makes for a weaker economy and country

How does a high rate of production (GDP) help the economy How does a high rate of production (GDP) help the economy? - jobs - directly - indirectly - spending - taxes

Gross Domestic Product (GDP) - the total value of the goods and services produced by the people of a nation during a year - doesn’t include the value of income earned in foreign country http://www.merriam-webster.com - United States GDP 2012 = $15.68 trillion - Haiti GDP 2012 = $7.8 billion

What are the effects on a locality or nation when there is a big change to the gross domestic product?