1. Chapter 3: Economic Activity in a Changing World
Describe the four types of economic shifts the United States has experienced
Describe what is shown by GDP, unemployment rate, rate of inflation, and national debt.
Explain how individuals and the government influence the economy
Describe the four stages of the business cycle

2. Key vocab Gross Domestic Product Standard of living Inflation
Deflation
Stagflation
Budget deficit
National debt
Budget surplus
Prosperity
Recession
Depression
Recovery

3. Calculating interest Price Interest rate
Interest (Price x Interest rate)
Total value ((price x (1+interest rate)
$7,500 7%
$7,450 8%
$8,200 5%

4. The Changing Us Economy
Throughout the years, the US economic system has changed. Each change affected what was produced and how people were employed. To gauge the health of our economic system, we use a variety of economic indicators
In the 1600’s we bartered goods and services
In the 1700’s farming revolutionized civilization and allowed for cities
In the mid-1850’s the Industrial Revolution started
In the 1900s information starts to move at a rapid pace to spur innovation
Today we are mostly technology based, what will be the change of the future?

5. How is our Economy Doing?
6 Key economic indicators
Gross Domestic Product
The Consumer price index
Industrial production
Interest rates
Non-farm payroll
Unemployment rate

6. How is our economy doing?
Gross Domestic Product (GDP)- measures the dollar value of all goods and services produced in the U.S. economy in one year.
This is measured by the Department of Commerce Bureau of Economic Analysis
Add the spending in the consumer, investment (firms), government, and foreign (exports minus imports) sectors
We must remove the effects of inflation from current GDP to compare the current figures to GDP numbers from other years.
Real GDP is the current GDP divided by the GDP price deflator.
The real GDP is one of the most important indicators of economic performance.
A rise in real GDP indicates economic growth, while a fall in real GDP indicates economic decline

7. How is Our Economy Doing?
The consumer price index compares the value of a basket of goods for urban customers over time.
An examples would be bread, milk, cereal, some vegetables, and some fruit
This index is compared month-to-month, year-over-year, or its trend.
This is kept by the Bureau of Labor and Statistics
This is usually a lagging indicator of economic health

8. How is our Economy Doing?
Industrial Production measures the output of American industry.
The Federal Reserve Board of Governors measures Industrial Production by calculating the manufacturing output in the consumer goods, business equipment, construction supplies, materials, manufacturing, mining, and utility industries.
Production is calculated in each sector monthly, and the percentage change in output is reported as Industrial Production.
Durable goods, such as cars, appliances, and furniture, as well as construction supplies, tend to be more sensitive to economic changes than are other manufacturing products.
Generally, Industrial Production increases during economic growth and falls during periods of economic decline

9. How is our Economy Doing?
The Ten-Year Treasury Interest Rate measures the percentage return investors receive on U.S. Treasury bonds.
The Federal Reserve Board of Governors measures Ten-Year Treasury Interest Rates, as determined daily in the bond market.
Treasury Interest Rates can be indicative of changes in other long- term interest rates such as mortgages and long-term business loans.
A decline in interest rates can precede increased investment spending to promote economic growth; high interest rates can lead to lower levels of investment and a decline in the rate of growth

10. How is our Economy Doing?
The Change in Non-farm Payroll measures the number of people employed by companies and government.
The Department of Labor Bureau of Labor Statistics surveys approximately 390,000 establishments to count the number of people employed each month, and the change from the previous month in the number of employed people is reported as the Change in Non-farm Payrolls.
Non-farm Payroll generally rises during economic growth and falls during economic decline.

11. How is our Economy Doing?
The Unemployment Rate measures the percentage of people in the labor force who were not working during the week of the survey, but had specifically looked for work within the previous four weeks (unless they were waiting to be recalled from layoff, in which case they need not have been looking for work to be counted as unemployed).
The Department of Labor Bureau of Labor Statistics surveys thousands of Americans each month to calculate the size of the labor force (those working plus those not working, but seeking work) and the unemployment rate (the unemployed divided by the labor force).
The number of people unemployed as a percentage of the labor force is reported each month as the Unemployment Rate.
The Unemployment Rate generally falls during economic growth and rises during economic decline

12. Ethics in business
You are the purchasing agent for a large furniture manufacturer. You have received several bids from lumber companies for a supply of teak, a very dense and decay resistant type of wood. The lowest bid comes from a lumber company that has been known for not placing a strong emphasis on local environmental concerns, especially resource depletion, when it cuts down trees.
How would the lumber company’s reputation affect your decision?

13. The Business Cycle
In a market economy, there is an economic cycle, which includes four stages: prosperity, recession, depression, recovery. There are also the four stages in the business cycle.
How would this cycle work in sports?
The government and congress enact laws to influence fiscal policy
Spending tax payer’s money and creating a “balanced” budget
The Federal Reserve (The Fed) regulates the amount of money in circulation, controlling interest rates, and controlling how much money banks can loan out.

14. The Business Cycle
Prosperity- low unemployment, high production of goods and services, high levels of investment,
Recession- 2 consecutive quarters of negative growth in the economy
Recovery- the economy starts to grow, unemployment lowers, and production increases
Depression- high unemployment, and low production of goods and services
October 29, 1929 “Black Tuesday” Beginning of the Great Depression
GDP fell $103B to $55B
Unemployment went from 1.6M to 12.8M
Wages went from $.55 to $.05
In March 1933 a bank holiday was declared to prevent a panic
Where are we right now???

15. Economist Profile Research famous economists
You will create a short presentation on the life of the economist including
Biography
Schooling
Employment
Economic theory/beliefs
List of Publications

16. Chapter 3 Quiz
Fill-in-the-blank

17. Chapter 4: Business ethics and Social Responsibility
Define ethics and business ethics
Describe why ethical behavior is good for business
List the steps for dealing with an ethical dilemma
Define what is meant by the social responsibility of business

18. Key vocab Ethics Business ethics Code of ethics Sweatshop
Conflict of interest

19. Business Math Calculating the Future value of money
You made $4,000 one summer working various jobs. You have two options: one spend all the money or save and invest the money.
What are the benefits of spending all $4,000?
What about saving and investing?
Calculate the future value of your money assuming a 5% annually compounding interest rate after 50 years.
FV=PV(1+interest rate)^time

20. The Nature of Ethics
What would you do if you found a copy of your final exam in the hallway?
What would you do if you found a diamond ring in a restaurant?
Ethics are moral principles by which people conduct themselves personally, socially, and professionally. Business ethics are rules that guide the behavior of a business and its employees.
Some cultures have different ideas for ethics. In the United States, bribery is highly illegal and unethical. In India bribery in encouraged

21. Laws and Ethics Ethics involve moral principles that govern conduct
Laws involve rules for conduct that may be used to punish violators
March 25, 1911 the Triangle Shirtwaist factory Company in NYC had a fire which killed 146 workers- mostly young immigrant female workers
Termed a sweatshop
The Occupational Safety and Health Administration (OSHA) which is a division of the US Department of Labor now oversees workplace safety and rules.

22. Ethical Decision Making
Identify the ethical dilemma
Discover alternative actions
Decide who might be affected
List the probable effects of the alternatives
Select the best alternative

23. Social Responsibility
Is it the duty of a business to do what is best for the good of society? Producing goods and services that are beneficial to society and providing jobs for people are not sufficient for a business to be considered socially responsible. They are expected to do more.
Some examples are that the LA times uses recycled paper and Automakers are starting to make hybrid cars that create less emissions
Why are businesses held to such a standard? Does the government do this? Or even individuals?
The Equal Pay act of 1964 requires that men and women be paid the same wages for doing equal work
The Americans with Disabilities Act bans discrimination against people with physical and mental disabilities

24. Social Responsibility
Employers owe it to their employees to take care of them financially and at the work site
At the end of the day you will always have people work for you and happiness is directly related to retention and productivity.
Businesses are usually based in a community and have a responsibility to help out with the local area since it is mutually beneficial
The real owner of the business is the shareholders, creditors, and out right owners.
The whole point of investing in a company is to see it get better and create value
Companies represent their financial performance to the public so they can choose to invest or not
Sarbanes-Oxley Act

25. Thematic Project
Research trends that are affecting businesses and careers and create a presentation about them. These trends include the rise of globalization, the evolution of technology, and the increasing importance of cultural diversity.
Choose a business or career that interests you
Preview business trends that are effecting the business or career
Research how different business trends are specifically influenced by these changing trends
Develop your presentation

26. Chapter 4 Quiz
Concentration game

27. Unit 1 Essential questions
Describe economic activity and how it affects everyday life.
What is the difference between a “want” and a “need”?
How do businesses satisfy wants and needs?
Why must societies make decisions about what to produce?
How do societies choose what to produce?
How is economic activity measured?
What are the phases of the business cycle?
Why is it important for businesses to behave in an ethical manor?
What does it mean for a business to be socially responsible?