1. Monday April 13, 2015 Turn in Progress Reports
Agenda
Homework
Turn in Progress Reports
Globalization/Protecti onism Review
Macroeconomics/Busin ess Cycle Notes
Make Up Work
Economics Quiz on Friday

2. Civics and Economics Day 136

3. Macroeconomics and the Business Cycle

4. Gross Domestic Product
Gross Domestic Product- total dollar value of all final goods and services produced in a country during a year.
Does not measure intangible things like leisure or stock
Real GDP- GDP after adjustments for inflation

5. Unemployment
Unemployment rate- the percentage of people in the civilian labor force who are not working but are looking for jobs.
National Rate: 5.5%

6. Who does it not include?

8. Inflation
Inflation- continued increase in the general level of prices.
When there is more money in circulation, the price increases.

11. Hyperinflation

12. How do we measure inflation?
Consumer price index- government samples prices every month of about 400 products used by consumers.

13. FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals and snacks);
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture);
APPAREL (men's shirts and sweaters, women's dresses, jewelry);
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance);
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services);
RECREATION (televisions, cable television, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

14. Business Cycle

15. Phases of Business Cycle
Unemployment
GDP
Expansion/ Recovery
decreasing
increasing
Peak
low
high
Contraction/ Recession
Trough

16. Business Cycle Phases More Money in the economy =
Expansion
Peak
More Money in the economy =
More Jobs (Unemployment)
More Goods and services bought (GDP)
The absolute top of the economy (No where to go but down)
Most Jobs possible
Most goods and services being bought

17. Economy is shrinking and less money is spent Lowest point of economy
Contraction(Recession)
Trough
Economy is shrinking and less money is spent
Less Jobs
Less Money being spent (Decrease GDP)
Lowest point of economy
High Unemployment, lots of people without jobs
Least amount of money being spent

18. Relationship between GDP and Unemployment
As Unemployment decreases, GDP increases.
As Unemployment increases, GDP decreases
(They are opposite)