1. Economic Activity in a Changing World
Chapter 3
Economic Activity in a Changing World

2. 3.1: US Economic History

3. Net or Newspapers?
Turn to p.39 in your book read quietly the passage titled “Net or Newspapers”
Think?
How do you obtain your top news stories of the day?
How does Penncrest get the word out?

4. Major Purpose of an Economic System?
To produce the goods and services wanted by people

5. Gross Domestic Product
The final output of an economy = goods & services
Over specific period of time
Determines how well an economy is performing

6. How to calculate GDP? Consumer goods and services (Spending)
Business goods and services (Production)
Government goods and services (Spending from our taxes)
Goods and services sold to other countries
(Excess of exports over imports)

7. United States GDP
According to Trading Economics, the GDP value of the United States represents percent of the world economy.

8. Standard of Living
Level of material comfort as measured by the goods and services that are available.

9. Unemployment Rate
Measures the number of people who are able to work but do not have a job during a given period of time.
Possible reasons for unemployment:
Quit your job
Just graduated from college
Laid off from work, corporate downsizing
> 4.4% > 8.1% 20137.3%

10. Rate of Inflation Inflation - increase in cost
An economy is too productive
Demand rises and cost rises
Hyperinflation
Deflation - decrease in cost
Demand decreases and cost decreases
Could cause and economic collapse

11. National Debt The main source of income for a government is taxes.
Defense, Education, Social security
Budget Deficit
Spending more than collecting
Borrows primarily from banks and other countries
National Debt
Total amount government owes

12. Introduction Activity
3.2 The Business Cycle
Introduction Activity

13. Sports Team
Step 1: Using your iPad research and choose a sports team (any sport any team)
Step 2: Research the last three seasons for that team (wins and losses)
Step 3: Look up three consecutive seasons for that team (about years ago)
Step 4: Explain the winning/losing streaks for that particular team
How does that relate to the business cycle?

14. 3.2: The Business Cycle

15. The Business Cycle
Represents the rise and fall of economic activity over time

16. Prosperity Peak of economic activity 1990s
Any variable can change things
Companies produce too much, people stop buying, or inflation starts to rise

17. Recession Slowness of economic activity
One industry, related industries, or spread to the entire economy
Ripple effect

18. Depression Deep recession Lasting years
Limited to one country but usually spreads to others
October 29, 1929
Black Tuesday
GDP fell 50% in 4 years
Unemployment rose 800%
Banks failed
Towns and counties printed their own money

19. Recovery Rise in activity after a recession or depression
New product innovation and demand for goods
Profits increase, business grows, economic activity soars.