Economics Final Chapter 15 Sections 1, 2, & 3 Chapter 16 Sections 1 & 3 Chapter 18 Sections 1 & 2

2 Chapter 15 Section 1 Population

3 I.Explain how population is estimated in the United States. A. United States Population A. United States Population 1. Census.gov 1. Census.govCensus.gov An official count of the population every 10 years. An official count of the population every 10 years. 2.Counting the Population 2.Counting the Population a)Urban Population a)Urban Population Village or town with 2,500 or more residents. b) Rural Population b) Rural Population Sparsely populated area.

4 I.Explain how population is estimated in the United States. A. United States Population A. United States Population 3.Historical Growth, since colonial times 3.Historical Growth, since colonial times a) The Net population has grown. a) The Net population has grown. b) The rate of growth has steadily decreased. b) The rate of growth has steadily decreased. c) The average size of households have decreased. c) The average size of households have decreased.

5 I.Explain how population is estimated in the United States. A. United States Population A. United States Population 4.Regional Change 4.Regional Change a) Center of Population a) Center of Population Point where the country would balance if it could be laid flat and if everyone weighted the same. b) Moving east to west b) Moving east to west

6 II. Describe the factors affecting future population growth. A. Projected Population Trends A. Projected Population Trends 1. Factors Affecting Growth 1. Factors Affecting Growth a) Demographers a) Demographers People who study growth, density, and other population factors. b)Fertility Rate b)Fertility Rate Number of births that 1,000 women are expected to have in their lifetime.

7 II. Describe the factors affecting future population growth. A. Projected Population Trends A. Projected Population Trends 1. Factors Affecting Growth 1. Factors Affecting Growth c) Life Expectancy c) Life Expectancy The average remaining life span of people who reach a certain age. d)Net Immigration d)Net Immigration The effect on the population by people moving into and out of the country.

8 II. Describe the factors affecting future population growth. A. Projected Population Trends A. Projected Population Trends 2.Projections by Age and by Gender 2.Projections by Age and by Gender a) Baby Boom a) Baby Boom Period of high birthrate from b)Population Pyramid b)Population Pyramid Diagram that shows the breakdown of population by age and gender. c) Dependency Ratio c) Dependency Ratio Ration of children and elderly per 100 persons age

9 II. Describe the factors affecting future population growth. A. Projected Population Trends A. Projected Population Trends 3. Projections by Race and Ethnic Origin 3. Projections by Race and Ethnic Origin Two fastest growing minorities are Hispanic and Asian components. Two fastest growing minorities are Hispanic and Asian components.

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11 Chapter 15 Section 3 Business Cycles and Fluctuations

12 I.Explain the phases of the business cycle. A. Phases of the Business Cycle A. Phases of the Business Cycle 1. First Phase – Recession 1. First Phase – Recession Period of decline in the economy as measured by real GDP. Period of decline in the economy as measured by real GDP. 2. Second Phase – Expansion 2. Second Phase – Expansion Period of recovery from a recession. Period of recovery from a recession.

13 I.Explain the phases of the business cycle. A. Phases of the Business Cycle A. Phases of the Business Cycle 3. Depression – not a common phase 3. Depression – not a common phase Severe economic state involving high unemployment, acute shortages, and excessive manufacturing capacity. Severe economic state involving high unemployment, acute shortages, and excessive manufacturing capacity. 4. Trend line 4. Trend line If no periods of expansion or recession occur. If no periods of expansion or recession occur.

14 I.Explain the phases of the business cycle. B. Points Along the Phases of the Business Cycle B. Points Along the Phases of the Business Cycle 1. Peak 1. Peak The point at which real GDP stops growing. The point at which real GDP stops growing. 2. Trough 2. Trough The turnaround point where real GDP stops going down. The turnaround point where real GDP stops going down.

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16 II. Trace the history of business cycles in the United States. A. History A. History 1. The Great Depression 1. The Great Depression Black Tuesday, October 29, 1929 Black Tuesday, October 29, 1929 Stock Market Crash Stock Market Crash Disparity in the distribution of income Disparity in the distribution of income Too many people borrowed heavily Too many people borrowed heavily 2. Business Cycles since WWII 2. Business Cycles since WWII Recessions have occurred fairly regularly Recessions have occurred fairly regularly

17 III. Identify five causes of business cycles. A. Causes A. Causes 1.Capital Expenditures – build and buy, then layoff and fire. 1.Capital Expenditures – build and buy, then layoff and fire. 2.Inventory Adjustments 2.Inventory Adjustments 3.Innovation and Imitation 3.Innovation and Imitation 4.Monetary Factors – easy and tight money policies. 4.Monetary Factors – easy and tight money policies. 5.External Shocks – wars and natural disasters 5.External Shocks – wars and natural disasters

18 III. Identify five causes of business cycles. B. Predicting Business Cycles B. Predicting Business Cycles 1.Econometrics Model 1.Econometrics Model Macroeconomics model that uses algebra equations to describe the economy. Macroeconomics model that uses algebra equations to describe the economy. 2.Index of leading indicators 2.Index of leading indicators Used to predict turning points in business cycles. Used to predict turning points in business cycles.

End of Ch 15 Sec 3

20 Chapter 16 Section 1 Unemployment

21 I.Explain how the Bureau of Labor Statistics determines if a person is employed. A. Measuring Unemployment A. Measuring Unemployment 1. Unemployment 1. Unemployment People available for work who made a specific effort to find a job during the past month. People available for work who made a specific effort to find a job during the past month. 2. Unemployment Rate 2. Unemployment Rate The number of unemployed persons divided by the total number of persons in the civilian labor force. The number of unemployed persons divided by the total number of persons in the civilian labor force.

22 I.Explain how the Bureau of Labor Statistics determines if a person is employed. A. Measuring Unemployment A. Measuring Unemployment 3. Limitations of the unemployment rate 3. Limitations of the unemployment rate a) Does not count those who have stopped looking for work. a) Does not count those who have stopped looking for work. b)Does not include part-time jobs. b)Does not include part-time jobs.

23 II. Describe five kinds of unemployment. A. Kinds of unemployment A. Kinds of unemployment 1) Frictional Unemployment 1) Frictional Unemployment Caused by workers who are “between jobs” Caused by workers who are “between jobs” 2) Structural Unemployment 2) Structural Unemployment Results when a fundamental change in the operations of the economy reduces the demand for workers and their skills. Results when a fundamental change in the operations of the economy reduces the demand for workers and their skills.

24 II. Describe five kinds of unemployment. A. Kinds of unemployment A. Kinds of unemployment 3) Cyclical Unemployment 3) Cyclical Unemployment Directly related to swings in the business cycle. Directly related to swings in the business cycle. 4) Seasonal Unemployment 4) Seasonal Unemployment Results from a change in the weather or season. Results from a change in the weather or season. 5) Technological Unemployment 5) Technological Unemployment Caused when workers are replaced by machines. Caused when workers are replaced by machines.

25 II. Describe five kinds of unemployment. A. Full Employment A. Full Employment Full employment is reached when the unemployment rate drops below 5%. Full employment is reached when the unemployment rate drops below 5%.

End of Ch 16 Sec 1

27 Chapter 18 Section 1 Absolute and Comparative Advantages

28 I.Explain the importance of international trade in today’s economy. A. The United States and International Trade A. The United States and International Trade 1. The key to trade is specialization. 1. The key to trade is specialization. 2.International Trade 2.International Trade Commerce among the nations of the world. Commerce among the nations of the world. The U.S. imports billions of dollars in products each year. The U.S. imports billions of dollars in products each year. The U.S. imports more than it exports resulting in trade deficits. The U.S. imports more than it exports resulting in trade deficits.

29 I.Explain the importance of international trade in today’s economy. A. The United States and International Trade A. The United States and International Trade 3.Necessity of Trade 3.Necessity of Trade Without trade many products would not be available to the world. Without trade many products would not be available to the world.

30 II. Describe the meaning of absolute advantage. A. Absolute Advantage A. Absolute Advantage Country’s ability to produce more of a given product than another country. Country’s ability to produce more of a given product than another country.

31 III. Relate the importance of comparative advantage to international trade. A. Comparative Advantage A. Comparative Advantage 1) Country’s ability to produce a good at a relatively lower opportunity cost. 1) Country’s ability to produce a good at a relatively lower opportunity cost. 2)Ability of a country to produce more efficiently. 2)Ability of a country to produce more efficiently.

End of Ch 18 Sec 1

33 Chapter 18 Section 2 Barriers to International Trade

34 I.Explain how international trade can be restricted to protect special interest. A. Restricting International Trade 1. Tariffs – tax placed on imports 1. Tariffs – tax placed on imports a) protective tariff a) protective tariff a tariff high enough to protect less efficient domestic industries b)revenue tariff b)revenue tariff designed to raise money from imported goods 2.Quotas 2.Quotas Limit placed on the quantities of a product that can be imported. Limit placed on the quantities of a product that can be imported.

35 II. Cite the main arguments for protection. A. Protectionist A person who favors trade barriers A person who favors trade barriers B. Arguments for barriers 1)National Defense 1)National Defense Too dependent leads to weakness Too dependent leads to weakness 2) Infant Industries 2) Infant Industries New or emerging industries should be protected from foreign competition. New or emerging industries should be protected from foreign competition.

36 II. Cite the main arguments for protection. B. Arguments for barriers 3) Protecting Domestic Jobs 3) Protecting Domestic Jobs Most frequent argument used to support trade barriers. Most frequent argument used to support trade barriers. Only works when other countries do not use trade barriers against us. Only works when other countries do not use trade barriers against us.

37 II. Cite the main arguments for protection. B. Arguments for barriers 4) Keep the money at home 4) Keep the money at home 5) Helping the balance of payments 5) Helping the balance of payments The difference between the money paid to and received from other nations. The difference between the money paid to and received from other nations. Trade deficit occurs when there is more importing than exporting. Trade deficit occurs when there is more importing than exporting.

38 III. Relate the history of the free trade movement. A. Great Depression A. Great Depression Most Favored Nation Clause Most Favored Nation Clause Allows a country to receive the same tariff reduction the U.S. negotiates with another country. Allows a country to receive the same tariff reduction the U.S. negotiates with another country. B. WWII B. WWII General Agreement on Tariffs and Trade (GATT) General Agreement on Tariffs and Trade (GATT) Signed by 23 countries to do away with import quotas. Signed by 23 countries to do away with import quotas.

39 III. Relate the history of the free trade movement. C. North American Free Trade Agreement (NAFTA) C. North American Free Trade Agreement (NAFTA) United States United States Canada Canada Mexico Mexico Reduced tariffs between the three countries Reduced tariffs between the three countries

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