1. Economics
Ms. Perez

2. Bell ringer: What role do you play in today economy?
Do you contribute to it? How?

3. Personal economics
The study of the roles people play in an economic system
Worker
Citizen
Consumer

4. What are some economic choices that you make?
What you buy?
What you save?
What do you WANT to buy?
What do you NEED to buy?
You make choices economic choices EVERYDAY!

5. Resources Land Labor Capital Entrepreneurship
You need money for these resources

6. $$$$ Land---> Rent Labor---> Wages Capital---> Interest
Entrepreneurship---->Profits

7. Freedom of choice
Right of the buyer to decide how to spend their money
Known as supply and demand

8. Economics
Study of the process that involves CHOICE making as people need to satisfy their WANTS vs. their NEEDS.

9. Economic systems Traditional Command or controlled
Capitalist or market
Mixed system
Table 1- Traditional
Table 2-Command or controlled
Table 3- Capitalist or market
Table 4- Mixed system
Table 5-Break up among tables

10. Bell ringer:
Based on presentations yesterday, which type of economic system is the U.S.?

11. 7th hour Table 1- Traditional Table 2-Command or controlled
Table 3- Capitalist or market
Table 4- Mixed system
Table 5-Traditional
Table 6-Command or controlled
Table 7- Capitalist or market
Table 8-Mixed system

12. Read your section on page 21-22
Write a summary of the system
List 3 advantages and 3 disadvantages of the system
You will have 10 minutes to do this

13. The United States Mixed system
Owner could open a factory in Illinois and hire 50 people but he must pay them minimum wage and operate factory according to safety features determined by the government.

14. Gross domestic product
Total value of ALL final goods and services in an economy
Consumer spending+government spending+ business investments + Foreign trade=GDP

15. GDP-Is it counted and where?
Get out a piece of paper and number it 1-6

16. Write down if this is an example of
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

17. You spend $5 to attend a movie
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

18. 2. The government increases its military expenditures by $1 billion.
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

19. 3. You buy General Motors stock for $1000 on the stock market.
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

20. 4. A housewife does a lot of work caring for her husband and two kids.
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

21. 5. You pay tuition to attend an economics course.
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

22. 6. You pay $300,000 for a house built 3 years ago.
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

23. Consumer Price Index
Change in price over time of a specific group of goods and services that are used by average people
Also called cost of living
Example:
Cost of milk in 1980 was $2.16
Cost of milk in 2011 is $3.36

24. Inflation
When price increases
Dollar can’t buy as much

25. What causes inflation? Inflation is caused by change in interests
Surging economy

26. Inflation effects?
Who is helped by inflation?
Who is harmed by it?

27. Helped or harmed?
A family that bought a house and has a fixed interest rate mortgage

28. Helped!
Helped—mortgage payment doesn’t change. Same house would cost more today

29. Helped or harmed?
A retired person who lives on fixed interest from bank certificates of deposit (CDs)

30. Harmed
Can’t buy as much with fixed income

31. Helped or harmed?
The federal government, which has a $4 trillion debt?

32. Helped
Debt total doesn’t hold as high of a value

33. Helped or harmed?
A retired teacher whose income comes from a fixed income pension?

34. Harmed
Same amount of money

35. Helped or harmed?
A savings and loan which has many fixed interest rate mortgages outstanding?

36. Harmed
Taking in same amount of money & it is not worth as much

37. Helped or harmed?
A two income family. The wife is a medical doctor, and the husband is a financial analyst?

38. Neither
Their salary will go up and so will prices

39. TOTD
On the same piece of paper where you wrote your response to the GDP questions and the inflation questions write this down
Write down one example of a group that would be helped or harmed by inflation. Identify if this group has been helped or harmed

40. Bell ringer:
Identify if this is part of the GDP and where it is counted?
General Motors buys new car-making robots
C if the item is counted as consumer spending
I if the item is counted as business investment
G if the item is counted as government spending
F if the item is counted as foreign trade
N if the item is not counted

41. The GDP is one way to measure the business cycle

42. Business cycle Swings up and down in GDP Prosperity/Peak
Recession/Contraction
Depression/Trough
Recovery/Expansion

43. The Business cycle-Copy down chart
Prosperity/peak
Recovery/expansion
Recession/contraction
Depression/trough
Years----->

45. As a group create someway to demonstrate 1 point in the business cycle
Rap
Scenario/skit
Prosperity, Recession, Depression
Or Recovery,
Extra credit- if you include more then one

46. As a group create a story, skit, song/rap that demonstrates 1 stage in the business cycle
Scenario/skit
Prosperity, Recession, Recovery, and Depression
Extra credit if one then 1 is represented

47. Group share!

48. Global Economy
Does what’s happening in the rest of world effect the US?
How?

49. 9/11
Gas prices
Job security
Inflation
Value of the dollar

50. Global Economy Why is this international trade so important?
Think about those things we would not have?
Think about things that other countries wouldn’t have?

51. Global Economy
Have computers changed the way business is done?

52. Computers have changed Global business
Speed in the office
elimination of jobs because of efficiency
Creation of computer jobs
Internet-global business in seconds
Doing business with people you may not have
Skype meetings

53. Which countries do you think are the most economically stable?
Why?

54. U.S., Great Britain, Germany, Japan, France and Canada
Production, technology, lots of jobs, good governments