1. ECONOMIC GROWTH

2. What is it?  The increase in national income over time.  The most common measure of economic growth is GDP, or Gross Domestic Product.  This is the market value of all “officially” recognized final goods and services produced within a country in a given period of time.

3. What does this measure?  GDP is the combined total of all incomes from profits, wages, royalties, interest and income generated abroad.

4. What does this not measure?  This may not measure inflation or the overall increase in prices in an economy.  This can be fixed by using real GDP.  That is GDP adjusted for inflation.

5. What does this not measure?  This does not measure population growth.  If an economy grows by 3 percent and the GDP rises by 3 percent, is there actually real growth in GDP?  This can be adjusted by computing GDP Per Capita.

6. What does this not measure?  The value of home produced goods.  Some goods and services are traded and therefore not recorded.

7. What does this not measure?  The standard of living in a country.  Just because there is a rise in GDP does not mean that everyone's standard of living has improved.  GDP does not measure air quality, holiday time, income distribution and overall public safety in an economy.

8. Statistical Errors  Mistakes happen.  Gathering data on a massive scale to compute GDP is a big task.  Given enough data, data processing and calculation, errors do occur.

9. The hidden economy  There are plenty of markets that are not looked at in computing GDP.  A lot of these are black markets.  This is when goods and services are provided illegally.  Some are harmful while others are not.

10. Examples of illegal markets  Drugs  Estimated annual market size of 400,000,000,000 USD a year.

11. Illegal Markets  Arms or weapons.  Not all weapons trading is illegal.  The market for illegal arms is huge.  What are some reasons why?

12. Illegal markets  Plants and animals.  It is illegal to capture and sell thousands of different types of animals.  After drugs and guns, this is the third largest illegal market.

13. Today’s Menu  Abalone: $52 per kilogram$52 per kilogram  Arowana Fish: $20,000$20,000  Baby Elephant in Thailand: $7,000$7,000  Baby Tiger in Iran: $3,200$3,200  Bear Bile: $200,000 per pound$200,000 per pound  Bear Paws: $50 for set of 4$50 for set of 4  Black Cockatoo: $31,000 in Australia$31,000 in Australia  Butterfly (Queen Alexandra): $8,195$8,195  Clouded Leopard: $5,700 in China$5,700 in China  Dog Meat: $29 in Vietnam$29 in Vietnam  Elephant: $28,200$28,200  Elephant Tusk: $1,800 in Vietnam$1,800 in Vietnam  Full Dead Bear: $4,500 in Taiwan$4,500 in Taiwan  Geckos from New Zealand: $1,300 in Europe$1,300 in Europe  Gorillas: $40,000$40,000  Iguanas: $10,600$10,600

14. Today’s Menu  Ivory: $1,800 per kilo$1,800 per kilo  Komodo Dragon: $30,000$30,000  Money in Europe: $123$123  Monkey in Thailand: $55$55  Orangutan: $45,000$45,000  Owl: $250 in India$250 in India  Pangolin: $5 in Indonesia, $15 in Malaysia, $100 in China$5 in Indonesia, $15 in Malaysia, $100 in China  Ploughshare Tortoise: $4,000$4,000  Polar Bear Skin: $7,760 to $9,930$7,760 to $9,930  Puppies trafficked from Ireland: $255 to $1,275 in the UK.$255 to $1,275 in the UK.  Rhino Horn Dagger: $14,000$14,000  Rhino Horns: $97,000 per kilogram$97,000 per kilogram  Rhino Horns (Crushed for medicine powder): $10 in Vietnam$10 in Vietnam  Shark Fins: $400 per pound$400 per pound  Snake Venom: $215,175 per liter$215,175 per liter

15. Today’s Menu Snakes (Banded kraits): $2,190 in India$2,190 in India Snow Leopard Pelt: $1,000 in Afghanistan$1,000 in Afghanistan Spotted Salamander: $103 on the Internet$103 on the Internet Tiger (Dead): $5,000$5,000 Tiger (Live): $50,000$50,000 Tiger Bone Wine: $88$88 Tiger Penis: $1,300$1,300 Tiger Remains: $70,000 in China$70,000 in China Tiger Skin: $35,000$35,000 Tortoises: $10,000 in Madagascar$10,000 in Madagascar Turtle: $20,000 in China$20,000 in China

16. THE ECONOMIC CYCLE  The growth of GDP is not always positive.  An economy can experience times when there is little or no economic growth.

17. Graph

18. Boom  This is the peak of the economic cycle.  This is when GDP is growing quickly.  Firms will be expanding and hiring.

19. Downturn  The economy is still growing but at a slower rate.  Demand for goods and services will start to fall.  Firms may be more reluctant to expand or hire new employees.

20. Depression or Slump  This is the bottom of the economic cycle where GDP starts to fall with significant increases in unemployment.  10% Decline in real GDP.  Lasting two or more years.

21. Recession  A less severe form of a depression.  This is defined by no or negative economic growth for two or more quarters, not exceeding two years.

22. Recovery  When GDP starts to rise again.  Businesses and consumers regain their confidence in the economy.  Firms begin expanding and people start spending.

23. The benefits of economic growth  Increased incomes  Increase in GDP usually means that average people in that country have more income.

24. Benefits of economic growth  More leisure time.  Greater life expectancy.

25. Benefits of economic growth  Better public services.  The more an economy grows, the more tax revenue that government can make.  This means that the government has more money to spend on public services.

26. Problems with economic growth  Regional differences.  Not every region benefits the same from economic growth.  Societal differences.  The rich get richer. The poor probably do not.

27. Problems with economic growth  Environmental Damage.  Economic development can come at a cost to the environment.

28. Problems with economic growth  Unsustainable Growth.  Economic growth generally uses up non renewable resources.  It is impossible to sustain high levels of growth using the same resources

29. Inflation  This is the overall rise in prices throughout the economy.  This could have negative effects on the economy.