business cycle national debt unit 7 decision, decisions
Post on 24-Dec-2015
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GDP: Gross Domestic Product
the dollar value of all final goods and services produced within a country’s borders in a given year
Nominal GDP: GDP measured in current prices
Real GDP: GDP measured in constant unchanging prices
Per Capita GDP
a country’s GDP divided by population
2005 US GDP- $12.77 trillion
population- 295,734,134
per capita GDP- $41,800
2005 China GDP- $8.158 trillion
population- 1,306,313,812
per capita GDP- $6,200
standard of living
Per capita GDP can often be used to compare countries and their standard of living: economic prosperity
GNP: Gross National Product
value of goods and services produced within a country in one year, plus income earned by citizens abroad, minus income earned by foreigners in the country
GNP= goods and services produced + money earned by citizens abroad – income earned by foreigners in the US
CPI: Consumer Price Index
an average of a specified set of goods and services
measures the purchasing power of the dollar
Business Cycle NOT a regular, predictable, or
repeating phenomenon like the swing of the pendulum of a clock.
Its timing is random & unpredictable
A business cycle has four phases.
Expansion
speedup in the pace of economic activity or Rise in GDP
Recovery: right after a trough, economy is getting better
Prosperity: right before a peak, economy is at its best
economic growth
Contraction
slowdown in the pace of economic activity
Economic decline marked by falling GDP Recession: 6 straight months of
contraction Depression: Especially long contraction
Trough
lower turning point of a business cycle, where a contraction turns into an expansion
GDP stops falling
Peak
upward turning of a business cycle
When GDP stops rising
**A trough & peak both represent a turning point in the business cycle**
National Debt
The National Debt is the total amount of money the Federal Government owes to treasury bondholders.
A bond is essential an IOU issued by the government as a way for them to borrow money.
Problems of the National Debt
Reduces the funds available for businesses to invest.
The government must pay interest to bondholders, the more the government borrows, the more interest it has to pay.
Roughly, to pay off the National Debt today, each citizen would have to pay just over $40,083.53
National Debt
http://brillig.com/debt_clock/ http://www.usdebtclo
ck.org/
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