BellWork Based on history, what has happened each time our economic system faced changes? Each change affected what was produced and how people were employed.

Objectives Describe the four types of economy that the United States has experienced. Describe what is shown by GDP, the unemployment rate, rate of inflation, and the national debt.

Key Concepts The Changing U.S. Economy Measuring Economic Activity

Key Terms the total value of the goods and services produced in a country in a given year gross domestic product (GDP) the level of material comfort as measured by the goods and services that are available standard of living

Key Terms a general increase in the price of goods and services inflation a general decrease in the price of goods and services deflation

Key Terms budget deficit when the government spends more on programs that it collects in taxes national debt the total amount of money a government owes

Key Terms when a government’s revenue exceeds its expenditures during a one-year period budget surplus

The Changing U.S. Economy Sometimes major shifts in certain growth areas can change the emphasis of the U.S. economy. The United States has experienced four major economic shifts.

Farming created our agriculture-based economy The invention of computers created the information-based economy 1600s 1700s 1850s 1900s Present Bartering and trading created our service-based economy The Industrial Revolution started the industry-based economy We live in the information age, but still rely upon the other types of economies

Unsung Heroes Each nation’s economy has had its unsung heroes and heroines. One hero of the Industrial Revolution might have been French-born Joseph Jacquard, who conceived the Jacquard loom, a system for the mass production of woven fabrics.

Measuring Economic Activity Economic indicators measure things such as: how much a country is producing whether the economy is growing how the economy compares to other countries

Gross Domestic Product Measuring gross domestic product (GDP), involves computing the sum of goods and services sold to businesses, consumers, the government, and other countries. gross domestic product (GDP) the total value of goods and services produced in a country in a given year

Standard of Living The United States has a high standard of living because of its productive workforce. standard of living the level of material comfort as measured by the goods and services that are available

Free Enterprise System Benefits to the Community Wealth is created by businesses Benefits to the Community Businesses pay taxes Businesses provide jobs

Unemployment Rate The unemployment rate measures the number of people who are able and willing to work but cannot find work during a given period.

With inflation, one’s buying power decreases. Rate of Inflation With inflation, one’s buying power decreases. inflation a general increase in the price of goods and services

Rate of Inflation War Increase in the price of raw materials Causes of Inflation War Increase in the price of raw materials Increase in expenses Increase in salaries Too much money circulating in the economy

Rate of Inflation Deflation can occur when the supply of goods is greater than the demand. deflation a general decrease in the price of goods and services

Deflation Economy produces more goods than people want. Sellers lower prices. Sellers cut production. People have less money to buy goods. Demand continues to go down.

National Debt To pay for a budget deficit, governments borrow money from the public, banks, and other countries. budget deficit when the government spends more on programs than it collects in taxes

National Debt If the national debt gets too large, a nation can become dependent on other nations or unable to borrow money. national debt the total amount of money a government owes

In the late 1990s, the United States experienced a budget surplus. National Debt In the late 1990s, the United States experienced a budget surplus. budget surplus when a government’s revenue exceeds its expenditures during a one-year period

When did the service-based economy begin? The service economy started in colonial times, when colonists traded among themselves for services.

What do economic indicators measure? Economic indicators measure the economic health of the nation.

What is the difference between a budget surplus and a budget deficit? A budget surplus occurs when revenue is more than expenses whereas a budget deficit occurs when expenses are more than revenue.

Activity In your pairs, locate information about the national debt. Prepare a summary of your findings with reference citations for class discussion. You can find basic information from government sources, encyclopedias, business publications, and academic journals

Objectives and Exit Ticket Describe the four types of economy that the United States has experienced. Describe what is shown by GDP, the unemployment rate, rate of inflation, and the national debt.

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