1. Economic Performance

2. Gross Domestic Product (GDP)
Measure of National Output
Multiplying all final goods and services produced in a 12-month period by prices
Is somewhat limited because it does not measure secondhand sales and the underground economy.

3. What is the underground economy?
Jobs that are under the table
Criminal oriented activity including drugs, gambling, smuggling, prostitution, and counterfeiting.

4. Disposable Personal Income
The total amount of income going to consumers before individual income taxes are subtracted.
Disposable Personal Income
The total income the consumer sector has at its disposal.

5. Inflation The rise in the general price level.
Determined by a price index.
Choose a base year.
Select a market basket of goods.
What percentage has the market basket of goods increased by year.

6. Consumer Price Index Reports changes in the prices of thousands
consumer goods and services.

7. Economic Growth
Beginning in 1991, the United States enjoyed the longest period of prosperity in its history, with the economy growing at a robust 3.9 percent in 1999.
Economic growth is best measured by real GDP per Capita: That is GDP, adjusted for inflation, divided by the population.

8. Importance of Economic Growth
Increases standard of living
Increases the tax base allowing government to provide services
Helps reduce poverty

9. Factors influencing economic growth
Available Natural Resources
High capital to labor ratio
Skilled and growing labor force
Entrepreneurs contribute to economic growth.

10. Economic Growth facts Economic growth is cyclical, goes up and down
Recession- Real GDP declines for two quarters in a row.
Expansion- A period of recovery from a recession.

11. Leading Economic Indicators
Statistics that economists monitor to assess and predict trends in the economy.

12. Unemployment
The percentage of unemployed people divided by the total number of people in the civilian work force.
Unemployment rate does not include those discouraged from finding work or those working part time that wish to work full-time
Happens for many reasons, many feel our region has been hurt by NAFTA.

13. Poverty Having an income below a certain level (Poverty Guidelines)
More than 12 percent of the population lives in poverty

14. CPI (Consumer Price Index)

15. Poverty Rates