1. Measuring Economic Activity
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2-1
Measuring Economic Activity
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2. Measuring Economic Activity
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Measuring Economic Activity
Learning Goals
1. Define gross domestic product.
2. Describe economic measures of labor.
3. Identify economic indicators for consumer spending.
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3. Key Terms Gross Domestic Product (GDP) GDP per capita
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Key Terms
Gross Domestic Product (GDP)
GDP per capita
unemployment rate
productivity
personal income
retail sales
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4. ECONOMIC MEASUREMENTS
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ECONOMIC MEASUREMENTS
Productivity is output per worker hour. In the workplace it can be difficult to measure productivity. In sports, there are clear-cut measures.
Improvements in capital resources, worker training, and management techniques can result in more output per worker.
In the 1890s, the average worker worked 60 hours/week! 
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5. GROSS DOMESTIC PRODUCT (GDP) learning Goal #1
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GROSS DOMESTIC PRODUCT (GDP) learning Goal #1
Most widely used measure of economic activity is Gross Domestic Product
GDP is the total dollar value of all final goods and services produced using labor & property in a country during one year.
One way to find out how well an economy is doing is to compare output from year to year.
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6. Components of GDP Four major categories of economic activity
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Components of GDP
Four major categories of economic activity
Consumer Spending for food, clothing, etc.
Business Spending for buildings, equipment, and inventory items
Government Spending to pay employees, buy supplies and other goods and services.
Exports of a country less than the imports into a country (net exports)
Services performed for self are not included in GDP (mowing your own lawn) 
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7. CHAPTER 2
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Components of GDP
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8. CHAPTER 2
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What’s not in the gdp?
Services performed for self are not included in GDP (mowing your own lawn) 
Only final goods are included
Items like wood, steel, and plastic used to make things for sale are considered intermediate goods, which do not count towards the GDP
If you measured intermediate goods, they would get counted again as part of the final goods
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9. Comparing GDP Increasing GDP usually signals a healthy economy
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Comparing GDP
Increasing GDP usually signals a healthy economy
Dollar value of GDP as a measure of economic growth is not the best method
GDP per capita =output per person, or GDP ÷ by the total population
Increase of GDP per capita signifies a growing economy
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10. LABOR ACTIVITIES Learning goal #2
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LABOR ACTIVITIES Learning goal #2
Workers of a country contribute to the economy in several ways:
Labor activities create needed goods and services
Wages they receive are spent to create demand for various items 
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11. Employment U.s LABOR FORCE
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Employment U.s LABOR FORCE
U.S. labor force consists of all people above age 16 who are working/seeking work
U.S. labor force Statistic of most concern is the unemployment rate, (the portion of people in the labor force who are not working)
The main cause of unemployment is reduced demand for goods/services being provided by various workers.
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12. CHAPTER 2
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Employment
Some of the main reasons why employment rate has be decreasing are:
Demographics of the aging baby boomers, who are retiring, living longer, and impacting this ratio;
Technology/DotCom collapse eliminated lots of malinvestment driven Tech jobs;
Financial/Credit crash eliminated lots of malinvestment driven banking/RE jobs;
Ongoing outsourcing, globalization, etc.
Robotics/Automation 
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13. CONSUMER SPENDING Learning Goal #3
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CONSUMER SPENDING Learning Goal #3
Personal income refers to salaries and wages as well as investment income and government payments to individuals.
The U.S. Dept. of Commerce measures retail sales, or the sales of durable and nondurable goods bought by consumers.
Indicator of general consumer spending patterns in the economy. 
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14. Check it out Economy at a Glance List of Countries by GDP
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Check it out
Bureau of Economic Analysis
Releases:
GDP by State
Trade in Goods & Services
Economy at a Glance
List of Countries by GDP
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15. Labor Stats Bureau of Labor Statistics National rate?
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Labor Stats
Bureau of Labor Statistics
National rate?
How is Ohio doing?
Consumer Price Index
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