1. What is GDP? What is real GDP? What is a final good or service? What does not directly affect real GDP? Questions to Ponder: Slide 1: Questions

2. What is GDP? What is real GDP ? GDP is the market value of all final goods and services produced in a country in a calendar year. Real GDP is GDP adjusted for inflation. What is a final good or service? A final good or service is sold to an end user and not an intermediate good which is used in the process of making a final good. An example of a final good would be a sandwich from a restaurant whereas the bread that the restaurant bought would be considered an intermediate good used in the process of producing the sandwich. What does not directly affect Real GDP? Goods and services produced in another country Goods and services that are used as intermediate goods and services Goods and services produced and consumed at home Slide 2: Answers

3. Scenario 1 Eating out at your favorite local restaurant Slide 3

4. Scenario 2 Service station attendant changes your flat tire. Slide 4

5. Scenario 3 Dad helping his child change a flat tire Slide 5

6. Scenario 4 An Italian vacationing in New York City Slide 6

7. Scenario 5 An American vacationing in Italy Slide 7

8. Scenario 6 Buying a bracelet while vacationing in Japan Slide 8

9. Scenario 7 Buying a chair from a factory in the US Slide 9

10. Scenario 8 Bread sold at the Family Bakery in Kansas Slide 10

11. Scenario 9 The bread sold to McDonald’s to use for hamburgers in Kansas Slide 11

12. Scenario 10 Buying your prom dress Slide 12

13. Scenario 11 Catering for your prom Slide 13

14. Scenario 12 Your first brand new car Slide 14

15. Scenario 13 The tires installed on a car at t he factory Slide 15

16. Scenario 14 Going to the movie theater Slide 16

17. Scenario 15 Getting snacks at the movie theater Slide 17

18. Headlines 1.New Home Construction Falls for 3 rd Quarter 2.Investment Spending Continues to Grow 3.Consumer Spending Increases 4.State Government Cuts Spending on Education 5.Businesses Watch Interest Rates Rise 6.Consumer Confidence Continues to Grow. Slide 18

19. X-axis 1 2345 6 789 1011 12 1314 15 Slide 19 10 20 30 40 50 60 70 Y-axis

20. X-axis 1 2345 6 789 1011 12 1314 15 Slide 20 Piecewise Function 10 20 30 40 50 60 70 Y-axis

21. Slide 21 Piecewise Function X-axis 1 2345 6 789 1011 12 1314 15 10 20 30 40 50 60 70 Y-axis (3, 40) (2, 30)

22. Slide 22 Piecewise Function X-axis 1 2345 6 789 1011 12 1314 15 10 20 30 40 50 60 70 Y-axis (5, 15) (7, 5)

23. Slide 23 Piecewise Function X-axis 1 2345 6 789 1011 12 1314 15 10 20 30 40 50 60 70 Y-axis (11, 30) (14, 70)

24. Slide 24 Piecewise Function X-axis 1 2345 6 789 1011 12 1314 15 10 20 30 40 50 60 70 Y-axis (5, 15) (7, 5) (3, 40) (2, 30) (11, 30) (14, 70)

25. Slide 25 Business Cycle Example Real Gross Domestic Product (In Billions of Dollars) Year 19301930 19311931 19321932 19341934 19351935 19361936 19371937 800 1,000 19381938 19391939 1,200 1,400 1,600 1,800 2,000 (1929, 1050) (1932, 750) (1936, 1000) (1937, 1100) (1938, 1000) (1940, 1500)

26. Slide 26 Business Cycle from FRED®

27. Slide 27 Business Cycle Example Real Gross Domestic Product (In Billions of Dollars) Year 20052005 20062006 20072007 20082008 20092009 20102010 20112011 12,800 13,200 20122012 20132013 13,600 14,000 14,400 14,800 15,200 (2004, 13600) (2005, 14400) (2007, 14800) (2013, 15600) 15,600 (2009, 14400)

28. Slide 28 Business Cycle from FRED®

29. Slide 29