gross domestic product total dollar value of goods and services produced in a country during one...
TRANSCRIPT
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- Gross Domestic Product Total dollar value of goods and services produced in a country during one year.
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- GDP Comparisons Rank Country GDP (millions of USD) World 54,347,038 1 United States 13,811,200 Eurozone 12,179,250 a a 2 Japan 4,376,705 3 Germany 3,297,233 4 China (PRC) 3,280,053 5 United Kingdom 2,727,806 6 France 2,562,288 b b 7 Italy 2,107,481
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- CPI Consumer Price Index The price of a selection of goods and services purchased by a typical consumer.
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- Inflation A general rise in the level of prices of goods and services over a period of time. Change in CPI
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- Unemployment Rate Percentage of the population without a job but looking for work. Is a stay at home Mom considered part of the unemployment rate?
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- 1. Frictional: People who have quit work They didnt like the job, boss, working conditions and they havent found a new job 2. Structural: caused by the restructuring of firms or mismatch b/ skills of job seekers and the requirements (location) of available jobs Example: coal miners in an area where mines are closed 3. Cyclical: occurs b/c of a recession Most serious type of unemployment 4. Seasonal: Demand for labor varies over the year Example: harvesting of crops
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- Period of economic growth GDP Increases Unemployment generally decreases Inflation generally increases
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- Highest level of economic activity GDP stops increasing Unemployment stops decreases Inflation stops increases and may start decreasing
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- Period of economic decline GDP decreases Unemployment increases Inflation generally decreasing
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- Lowest level of economic activity GDP stops decreases to lowest levels Unemployment is at its highest levels Inflation stops decreasing and may start increasing
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- Expansion : Rising prices, GDP rises, jobs growth Expansion
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- Peak : A period of prosperity, growth stops Expansion Peak
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- Contraction : Unemployment rises, consumer spending low, profits low- 6m to a year Inflation Peak Contraction
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- Trough : Long term major slowdown, unemployment soars, firms fail. Inflation Peak Recession Trough
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- Recession: Real GDP must fall for at least 6 months in a row Depression: Prolonged recession (6-18 months long) ***We attempt to keep the business cycle STABLE. Periods of extreme growth and decline are NOT desirable!
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- Create a poster illustrating each phase of the business cycle. Each phase should include: Events that might occur Mood of consumers & businesses Pictures