Introduction to Business Name _________________
Ch. 3- Economic Activity in a Changing World Date
____________
“Those who cannot remember the past are
condemned to repeat it.”
-George
Sentayna
An
American Writer
Measuring Economic Activity
Things Measured:
Economic Indicators
Gross Domestic Product (GDP)
® GDP
–
® Figure
3.1 - pg. 36
What is included in GDP
® NOT
INCLUDED:
Standard of Living
® US has a very high standard of living.
® In the 1990’s the GDP of the US grew from
about $5.5 trillion to almost $9 trillion.
Unemployment Rate
® Temporary
& seasonal unemployment have….
® Serious
types of unemployment:
Unemployment Rates in the US
& Japan
Rate of Inflation
® Inflation
–
Factors Leading to Inflation
Hyperinflation
® Hyperinflation
can occur when...
The Pattern
Deflation
® Deflation
–
In the 1990’s this happened in
Asian Nations.
® Manufacturing
countries like Japan & Taiwan
over-produced goods such as TVs and VCRs which led to an economic collapse.
The United States
® The US
tries to maintain a ______________ but ________________ economic growth to avoid _________________
& ___________________.
How Done:
National Debt
® Taxes
–
® Taxes
are used for social programs:
® Budget
Deficit –
The US
in the 1980’s
National Debt
® National
Debt -
Budget Surplus
® Government
uses the surplus to:
Fast Review – pg. 39
® What
are some reasons for unemployment?
® What
is the difference between inflation & deflation?
The Business Cycle –
® Economics
go through up’s & down’s as a result of:
4 Phases of the Business Cycle
Figure 3.2 - Pg. 40
What can changes in the economy do?
Prosperity –
1990 – United States
® Record period of Prosperity.
® Due to:
Recession –
® Ripple effect –
® 1970’s – Oil Shortage in the US caused gas
prices to go up.
® Gas is used for everything, therefore prices went up
and led to a Recession.
Depression –
Factors
The Great Depression
® Black
Tuesday – October 29, 1929
® Between
1929 – 1933 the GDP fell nearly 50%.
® The number
of people out of work rose to nearly 800%.
® The
average manufacturing wage fell from $.55/hour in 1929 to $.05/hour in 1933.
Banks during the Great Depression
® March
1933 – A Bank Holiday was declared to prevent panic.
Currency during the Great Depression
® Money
supply fell by ________.
Recovery –
® In 1939 the US was only beginning to recover
from the Great Depression when WWII began.
Fast Review – pg. 43
® What
are the four phases of the business cycle?
® How
does the ripple effect impact the economy?