assessment review power point
TRANSCRIPT
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Economics
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Gross Domestic Product
Final Value of all goods
and services produced bya country during a given
time.
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Gross Domestic Product
Calculated by:
All purchases of
final goods andservices
Consumers
BusinessesGovernments
Net exports
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Real GDP
GDP in current
prices is
converted toinflation-
adjusted GDP
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Inflation
A period ofrising
priceswhen the
purchasing
powerofthe dollaris
falling.
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PerCapital GDP
Dividing Real GDP by
a Countrys Total
Population
GDP/Total Population
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Standard of Living
A measure of the amount of
goods and services available
to citizens.
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Productivity
Output ofgoodsand servicesas
measured per
unit ofinput:
Time
Workers Capital
Resources, etc
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Labor Productivity
The amount the
workforce can
produce inagiven time.
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Chapter 10LaborForces
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Labor Productivity
Rising Labor
productivity means
businesses can payworkers higher
wages without
increasing costs.
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Market Forces
Demand goes
Supply the SameWage rate goes
Demand goes
Supply the sameWage rate goes
Demand the same
Supply goes
Wage rate goes
Demand the same
Supply goes
Wage rate goes
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LaborForce
All people 16years of age
or older whoare currentlyemployed or
looking forwork.
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LaborForce Changes
1- Farm Economy
2- Manufacturing Economy
3- Service Economy
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Salary Differences
Differences inAbility
Differences inEffort or Jobs
Experience
Education and
Training
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Non-market Forces
People stay were they are
Job Discrimination
Government Legislation
Labor Unions
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Chapter 13
Money
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Money
Anything generally
accepted as:
medium ofexchange
store of value measure of value
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The Federal Reserve System
The Nations Banking
SystemCommonly called Fed
12 Federal ReserveBanks
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Fed Functions
Supplies Economy with Cash
Processes checksand EFTs
Holds ReservesforDepositoryInstitutions
Servesasbankerto the Federal
Government Supervises Banks
Regulates the Money Supply
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Deflation
A time when
prices are
falling.
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Demand-pullinflation
Too muchmoney chasingtoo few goods
Demandincreasesfasterthansupplythus causingprices to rise
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Cost-push inflation
A period of
rising prices
due to anincrease in the
cost of
production.
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Those who sufferfrom inflation
People living on
fixed incomes
Savers
Lenders
Business Firms
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Those who benefit from inflation
Those whocan increase
their income
Borrower
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BusinessCycle
A pattern of
upsand
downsin theeconomy
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Peaks
The economy isbooming.
Business is nearcapacity
Jobs areavailable
Prices areincreasing
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Recession
Two consecutive quarterof
declining real GDP
Lay offofworkers
Reductionin purchases of
raw materials
Reductionin productivity
Usuallylast 6 to 18 months
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Trough
Afterrecession theeconomy willreach itslow
point
Factoriesless than
capacity
Unemployment high levels Weak demand forproducts
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Expansion
Economy
recovering
Business andconsumer
spending
increase Unemployment
declines
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Economic Indicators
Measures of the condition of
the economy
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1. Leading Economic Indicators
Show early signs of recession and
expansions
Average Weekly hours in private non-agricultural industries
More hours worked so more income
for employees
Less hours worked so less income for
employees
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2. Coincident Indicators
Reflect the
current pace of
the economy
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Lagging Indicators
After a change has
occurred in the
economy.
Unemployment
rate
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Seasonal Unemployment
Employees
spend part of the
year in voluntaryunemployment
Ex: waiters at awinter resort.
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Structural Unemployment
Jobsare available but
individuals dont have
the skillsforthe job.
Technology changes
Blue collarjobsunavailable but white
collarjobsare available
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Consumer Price Index
CPI
Measures ofthe price
changes overa period of
time.
Measures price changesinapprox. 400 goods.
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CPI
Food and Beverage Housing
Clothing
Transportation
Medicaland
PersonalCare
Entertainment
Education
Tobacco
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Stabilize the Economy
Fiscal Policy (Government
Taxing and Spending
Monetary Policy (Federal
Reserve controlling the moneysupply)
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Chapter15
International
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Import
To bring or carry in from anoutside source, especially to
bring in (goods or materials)from a foreign country for
trade or sale.
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Export
To send or
transport (a
commodity, forexample)
abroad,
especially fortrade or sale.
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Absolute Advantage
One nation can produce an
item with fewer resources than
another nation can
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Comparative Advantage
The ability to produce an item
at a lower opportunity cost.
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Barriers to International Trade
1. Tariffa duty or tax on importsGoal: Raise money
Goal: Protective tariff to
protect industries.
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Barriers to International Trade
2. Quotas restrictions on thenumber of goods that can enter a
country from abroad.
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Barriers to International Trade
3. Preservation ofstandards -
Government rules
and regulations onimported goods.
Example: laborpractices
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Balance of Trade
The
difference
between theexports and
import of
merchandise
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Trade Deficit
The excess ofexpenses
incurred in tradeover expected
income ( imports
exceed exports)