Principles of Business, Marketing, and Finance Economic and Ethical Activity in a Changing World Copyright © Texas Education Agency, 2011. All rights reserved

Economic Measurements for a Changing World Gross Domestic Product-total value of goods and service produced in a country in a given year Consumer goods and services Business goods and services Government goods and services Goods and services sold to other countries Explain how international business has affected gross domestic product in both a positive and negative way. Copyright © Texas Education Agency, 2011. All rights reserved

Economic Measurements for a Changing World Unemployment Rate - a measure of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. Inflation - a general increase in the cost of goods and services Standard of Living - amount of goods and services the average citizen can buy Deflation - when the supply of good is greater than the demand Ask students to explain how an increasing unemployment rate has a domino affect on the economy. Have someone look up on the internet what the current unemployment rate is. Copyright © Texas Education Agency, 2011. All rights reserved

Economic Measurements for a Changing World National Debt -total amount of money a government owes Budget Surplus -when a government’s revenue exceeds its expenditures during a one-year period Copyright © Texas Education Agency, 2011. All rights reserved

Four Phases of the Business Cycle Basic Business Cycle Peak Contraction Trough Expansion Prior to any discussion have students write down which cycle they believe the economy is in currently and then at the end of the discussion have then show their answers to the class and see if anyone wants to change their answer. Prosperity-peak of economic activity Recession-economic slowdown Depression-a deep recession that affects the entire economy and lasts for several years Recovery-the rise in business activity after a recession or depression Copyright © Texas Education Agency, 2011. All rights reserved

The 4 Stages of the Business Cycle Contraction - Economic growth weakens and becomes a recession. Stocks enter a bear market. If a recession lasts a particularly long time and gets progressively worse, economists might call it a depression. Economically, things are really bad during a depression. A prime example of this in American history was the Great Depression, which lasted more than a decade and resulted in thousands of people losing their jobs and their life savings. Ask students to explain how an increasing unemployment rate has a domino affect on the economy. Have someone look up on the internet what the current unemployment rate is. Copyright © Texas Education Agency, 2011. All rights reserved

The 4 Stages of the Business Cycle The severity of a contraction can also bring about greater government intervention into the country's economy. As stock prices fall and unemployment grows and consumer confidence plummets, the government will seek to turn the economy back toward expansion, introducing measures designed to help business and workers. A prime example of this was the New Deal offered by President Franklin D. Roosevelt. A massive set of economic incentives, the New Deal helped the American economy get back on its feet after the Great Depression. Ask students to explain how an increasing unemployment rate has a domino affect on the economy. Have someone look up on the internet what the current unemployment rate is. Copyright © Texas Education Agency, 2011. All rights reserved

The 4 Stages of the Business Cycle Trough - The economy hits bottom. is the low point of an economy. As they do with a peak, economists will identify a trough only after the fact, when productivity begins to head upward again and the low point can be calculated. Ask students to explain how an increasing unemployment rate has a domino affect on the economy. Have someone look up on the internet what the current unemployment rate is. Copyright © Texas Education Agency, 2011. All rights reserved

The 4 Stages of the Business Cycle Expansion - The economy starts growing again. It's signaled by a bull market. A well-managed economy can remain in the Expansion phase for years. Towards the end of this cycle, the economy overheats and Inflation rises.  It is a time when businesses are expanding, producing more goods and hiring more workers. This is generally a happy time for people because it usually means that more money is coming into the economy and that people and businesses are able to afford more things than they normally might be. Ask students to explain how an increasing unemployment rate has a domino affect on the economy. Have someone look up on the internet what the current unemployment rate is. Copyright © Texas Education Agency, 2011. All rights reserved

The 4 Stages of the Business Cycle Peak - The last month and quarter of growth before the recession starts. You usually don't know you are in a peak until it is too late.  A peak is usually identified after it happens because this is the time when a country's expansion is at its highest level. Economists don't really know when the expansion is going to peak, so they wait until production and hiring start to fall, then identify the peak. Ask students to explain how an increasing unemployment rate has a domino affect on the economy. Have someone look up on the internet what the current unemployment rate is. Copyright © Texas Education Agency, 2011. All rights reserved

Lesson PowerPoints / 05_economicsethics_part_1.pptx Business Cycle Project You conduct research about the 4 phases of the business cycle and then prepare a PowerPoint presentation that: Defines the 4 phases of the business cycle and gives 2 concrete examples of activities that happen or do not happen during each phase (4 slides) States the phase that the U.S. is currently experiencing and reasons why (1 slide) Choose 2 other countries and determines the phase they are experiencing and gives the reasons why for each country. (2 slides) www.phsbmf.weebly.com Lesson PowerPoints / 05_economicsethics_part_1.pptx