Use the scissors to cut the money. You have the remainder

of this song.

CALL TO

ORDER

Welcome to Unit 8: Cash Rules Everything Around Me

Today’s ObjectiveStudents will be able to identify and describe

how GDP, CPI, Inflation, and Unemployment measure the health of our economy BY

• listening to an audio clip about the 2008 economic collapse,

• completing a graphic organizer, • participating in a simulation (all week) and • calculating the GDPs for various countries.

Listen to the sound clip. How do the occurrences indicate a

recession? Headlines How does this

illustrate a recession?

Dentist Observes A Rise in Cracking Teeth

Urologists See Rise in Vasectomies

Traffic Delays Drop by One-Third

Women Rob Banks and Buy Cashier’s Checks to Pay Their Rent

Porn Sales are Down

Shark Attacks at Their Lowest Point in 5 years

Expansion

Unemployment goes down.

A period of economic growth.

GDP goes up.

CPI goes up (inflation).

• Many people in Baltimore are employed, so they buy new cars.

• General Motors wants to produce more cars, so it gets a loan from Bank of America to hire workers.

• General Motors hires more workers to make more cars.

• These new workers now have jobs, so they spend money on new refrigerators…

ExpansionDuring expansions, money flows well between consumers, businesses, and

banks.

Unemployment goes up.

A period of economic downturn.

GDP goes down.

CPI goes down.

Recession

• General Motors goes out of business and all of its workers lose their jobs.

• These unemployed people stop buying coffee and muffins.

• Starbucks tries to get a loan to stay in business.

• Bank of America won’t loan money to Starbucks because it thinks it is going out-of-business and won’t pay them back.

• Starbucks goes out of business and all of its workers lose their jobs.

• These unemployed people stop buying…

RecessionDuring a recession, money does not flow well between consumers, businesses, and

banks.

Unemployment• You must able to work, want to

work, and unable to find a job• Unemployment Rate = Percentage

of people who fit this requirement

Good?Under 5%

Bad?Over 5%

What do you think the current unemployment rate

it?

Bad.9.5%

I’m looking

for work but I can’t find a job!

CPI: Consumer Price Index

It is a basket of goods that we use to measure how prices rise and fall (inflation).

2008 2009

Ketchup $2.19 $2.25

Pencil $.10 $.12

Haircut $12 $13

Consumer Price Index2008 2009

Cheerios $3.79 $3.88Dozen Eggs $2.19 $2.22

Gallon of Milk $3.69 $3.79Gasoline $1.88 $1.74

12-pack of Coke $4.99 $4.99$16.54 $16.62

CPI: .5%A positive CPI means that prices are

going up

InflationWhen the price of goods and

services go up

Cost: 1944

Cost: 2011

The total value of all final goods and services made IN a country during the year.

GDP: Gross Domestic Product

If you bought everything that was for sale in the United States in one year, how much would it cost you?

The answer: $14 trillionThat’s $14,000,000,000,000.00

Gross Domestic Product