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ChapterChapterChapterChapter

Economic Activity

2-12-1 Measuring Economic Activity

2-22-2 Economic Conditions Change

2-32-3 Other Measures of Business Activity

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LESSON 2-1LESSON 2-1

Measuring Economic Activity

Goals Define gross domestic product. Describe economic measures of labor. Identify economic indicators for

consumer spending.

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Key Terms

Gross Domestic Product (GDP) GDP per capita unemployment rate productivity personal income retail sales

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GROSS DOMESTIC PRODUCT (GDP) Components of GDP Comparing GDP

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Comparison of GDP in Selected Countries

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>> C H E C K P O I N T

What types of economic activities are not included in GDP?

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LABOR ACTIVITIES

Employment Productivity

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>> C H E C K P O I N T

What are ways to increase productivity?

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CONSUMER SPENDING

Personal income Retail sales

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>> C H E C K P O I N T

What are the main sources of personal income?

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LESSON 2-2LESSON 2-2

Economic Conditions Change

Goals Describe the four phases of the

business cycle. Explain causes of inflation and

deflation. Identify the importance of interest rates.

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Key Terms

business cycle prosperity recession depression

recovery inflation price index deflation

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THE BUSINESS CYCLE

Prosperity Recession Depression Recovery

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>> C H E C K P O I N T

What are the four phases of the business cycle?

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CONSUMER PRICES

Inflation Causes of inflation Measuring inflation Deflation

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>> C H E C K P O I N T

What are the main causes of inflation?

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INTEREST RATES

Types of interest rates Changing interest rates

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>> C H E C K P O I N T

How do interest rates affect business activities in our economy?

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LESSON 2-3LESSON 2-3

Other Measures of Business Activity

Goals Discuss investment activities that

promote economic growth. Explain borrowing activities by

government, business, and consumers. Describe future concerns of economic

growth.

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Key Terms

capital project stock bond budget surplus budget deficit national debt

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INVESTMENT ACTIVITIES

Personal savings The stock market The bond market

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>> C H E C K P O I N T

Name some examples of capital projects.

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BORROWING

Government debt Business debt Consumer debt

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>> C H E C K P O I N T

What is the cause of a budget deficit?

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FUTURE ECONOMIC CHALLENGES Limited access to health care Need for proper housing for many

people Traffic and crime Unemployment

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>> C H E C K P O I N T

What are future economic concerns for a country’s economy?