1. Bell Ringer
What is the term we use for the measure of economic growth? (Three words, first starts with G)

2. Inflation and The Economy

3. Lesson Frame
We will- Analyze calculation and effects of inflation I will-Calculate Consumer Price Index and Inflation Rate

4. Gross Domestic Product (GDP)
Measure how economy is doing
How many products are made
Durable and Non-durable goods
Final goods
Gross Domestic Product (GDP)
Do Not Write Down

5. Intermediate goods- used in production of other goods
“middle” of production
Example ___________
GDP does not include
Do Not Write Down

6. 2. Used goods- already counted as final Black market goods
Non-market activities
Babysitting, mowing lawns
5. Imported goods
6. Financial assets- stocks, bonds
GDP does not include
Do Not Write Down

7. Aggregate Expenditures Model
Calculate GDP GDP= C+I+G+NX C= Consumer goods I= Business and Invesment G= Government spending NX= Net Exports
Aggregate Expenditures Model
Do Not Write Down

8. Cost Push (Supply-side)- increase in per unit production costs
Demand Pull- caused by excess spending beyond economy’s capacity to produce
Cost Push (Supply-side)- increase in per unit production costs
Kinds of Inflation

9. Measure of price change for goods and services between years
Quantity of Goods and services= a “basket”
Change between years is the inflation rate
Consumer Price Index

10. CPI = (Cost of basket in year1/ Cost of basket in base year) * 100
Consumer Price Index

11. Calculating Inflation
Inflation rate- percent % change in price level
Deflation- decrease in price level
Calculating Inflation

12. Required Reserve and CPI and inflation rate Worksheet
Exit Ticket
Required Reserve and CPI and inflation rate Worksheet