Measuring the Economy 23.2

Rate yourself! EACHYou will rate yourself according to the homework rubric for EACH poster! OVERALLAt the end you will give yourself and OVERALL rating for the assignment. –Do this on the back in a blank box next to your name! Remember:ALL If you missed something you have to rate yourself a 2!Remember: in order to get a 4 it must be ALL the same information I have and in your own words. If you missed something you have to rate yourself a 2!

Economic Growth Growth is good for everyone! When the economy is growing more people have jobs, businesses produce more, we have more goods and service and money to purchase them with.

Real GDP Real GDP shows an economy’s production by taking out prices. This helps to see if we really made more. When Real GDP goes up the economy is growing! When Real GDP goes down the economy is declining (getting worse)! cars x $1,000 = GDP $20, cars x $2,000 = GDP $40,000

Business Cycle The economy grows over time, but not at a constant rate. The ups and downs of the economy are called the business cycle. Goods time and bad times won’t last forever so plan!

Expansions This is when Real GDP goes up. The economy is getting better! This is a time when the economy is growing by a little or a lot it doesn’t matter. An expansion is longer than a recession. Thank goodness!

Recession This is when Real GDP goes down for 6 months or more. The economy is getting worse! A recession is shorter than expansion. If it becomes severe then it is a depression.

Unemployment Civilian labor force is everyone over the age of 16 that is working or looking for work. Unemployment Rate is the percent of people who are not working but are looking for work. When unemployment rate drops the economy grows! We want LOW unemployment. High unemployment=recession Low unemployment=expansion

Fiscal Policy Fiscal policy are the changes in taxes and government spending. Political differences often prevent effective use of fiscal policy. What if they increase taxes? might –We have less money to spend might equal recession What if the decrease taxes? might –We have more money to spend might equal expansion?

Price Stability Inflation is the constant increase in the prices of goods and services. As inflation increases, your money will buy you less. What you could buy for $1 last month is now $1.50! Consumer Price Index is a popular measure of the price levels of 400 commonly used products. (like toilet paper!) Stable prices/no inflation=expansion Unstable prices/inflation= recession

EVERYONE write this in one of your BLANK boxes!!! Overall Growth EVERYONE write this in one of your BLANK boxes!!! we needTo experience growth we need: –Real GDP to increase –Lower unemployment rates –Stable prices without inflation –Government fiscal policy to help the market continue to grow –Confidence in the market –If these happen we will reach a period of expansion

NOW WORK ON TEST REVIEW AND VOCAB!!! Vocab 23.1, 23.2, 26.1, 26.2 Test study guide