1. Chapter 19, Section 2 Economic Activity and Productivity

2. Main Idea
Circular flow model shows how our economy operates!

3. I. Circular flow of economic activity
Market- a location or other situation that allows buyers and sellers to exchange a certain economic product.
B. Economic decision makers are the consumer, business, government.

4. C. Factor markets- Where productive resources are bought and sold.
D. Product markets- Where producers offer goods and services for sale

5. II. Productivity and Economic Growth
Productivity- a measure of the amount of output produced by a given amount of inputs in a specific time period.
B. Specialization- can improve productivity. Can be more efficient.

6. C. Division of labor- the breaking down of a job into separate, smaller tasks performed by different workers.
D. Economic Interdependence- We rely on others, others rely on us for goods and services.
***Economic events in certain parts of the world impact all of us.***

7. E. Inflation- General rise in prices.
INFLATION CALCULATOR
F. Recession- phase in business cycle characterized in the decline in spending and increase of unemployment.

8. G. Depression- long period of time when business conditions are poor and unemployment is extremely high!

9. Mini Quiz!!!
1. Increase in prices, decline in spending, high rate of unemployment?
2. The general rise in prices is known as?
3. Do economic events transpiring world-wide affect us in America?