Introduction to Business & Marketing Economic Indicators Introduction to Business & Marketing

Task 45 Identify the measures / indicators of economic activity.

How do you measure up? Student performance is measured by: GPA SAT Class rank

How do you measure up? Baseball performance is measured by: Batting average Strikeouts ERA Home runs RBIs

Economic Indicators Economic indicators are figures used to measure a country’s economic performance We measure things like: how much a country produces whether a country’s economy is growing how a country’s economy compares to others * There are many indicators. We will study GDP, inflation, and unemployment.

Gross Domestic Product GDP is the total value of the goods & services produced in a country in a given year Sum of all goods & services sold by U.S. producers (businesses) We sell to individual consumers, other businesses, government and other countries We sell to: individual consumers, other businesses, government, and other countries.

What GDP Tells Us Changes in GDP show whether the economy is growing or slowing Commonly used to gauge a country’s standard of living

Measuring GDP – Fun facts One of the most important indicators of economy’s status! U.S. has a very high GDP – $18.56 trillion (#1) Examples: China: $11.39 trillion (#2) Canada: $1.532 trillion (#10) North Korea: $28.5 billion (#125)

Inflation Inflation is a general increase in the price of goods & services Consumer buying power decreases because it costs more for something today than it did yesterday

What Inflation Tells Us Indicates that the cost of living is getting more expensive Most people usually get a 2 - 3% pay raise each year to offset an increase in the cost of living Most people usually get a 2-3% pay raise each year to offset an increase in the cost of living

What causes inflation? Supply < Demand War scarce resources are transferred to the war effort, less for consumers to buy Price of imports increases in cost of raw materials, production, expenses, salaries, etc. Too much money in circulation too much spending War – scarce resources are transferred to the war effort, which means there is even less for consumers to buy Price of Imports – increases in cost of raw materials, production expenses, salaries, etc. Circulation – too much spending

Unemployment Rate Unemployment measures the number of people who are able & willing but cannot find work Shows whether the economy is picking up or slowing down US: 4.3% = 6.8 million people (Sept. 2017)

What Unemployment Tells Us The unemployment rates shows whether the economy is picking up or slowing down It is a lagging indicator (changes after economy has already begun to follow a particular trend)

Why does Northern Virginia experience smaller changes to the employment rate than other parts of the country? THINK ABOUT IT

Closing Task Describe the relationship between the stages of the business cycle and economic indicators.

Mon. October 17, 2016 Objectives (45) Identify the measures / indicators of economic activity. Reminders PSAT Day Wednesday 10.19 Econ. Unit Test Next Tuesday 10.25 NEXT CLASS Wednesday, October 19th PSAT Day // 8 – 5 – 6 – 7 Workplace Readiness Skills Short Lesson for a Short Class Period! Unit Review  Fri. October 21st CLOSURE Describe the relationship between the stages of the business cycle and the economic indicators.