2On you handout, write down 5 What does theterm ECONOMICSmean to you?On you handout, write down 5words / thoughts that come to mind when you hear the term “economics”.
3What is Economics?The use of limited resources such as money, raw materials, labor, etc by nations and states
4Georgia’s Economy How Georgia produces How much debt Georgia has How many Georgia citizens are employed
5The better a state’s economy, the happier and secure Economic GrowthAlways encouraged because…The better a state’s economy, the happier and secureits citizens tend to be!What do you know about the current state of our economy in Georgia? The U.S.?
6What is free trade?Importing and exporting products between nations or regionsImportsProducts coming into GeorgiaExportsProducts leaving Georgia
7Benefits ofTRADEAllows Georgia to earn money by selling to the rest of the world, while also purchasing products from other places that Georgians need or want.
8Why was Georgia founded? England founded Georgia to produce goods for tradeSavannah PortCottonRiceIndigoLumberTobaccoInternational trade was essential to Georgia’s survival during the 1800’s.
9Today… Georgia relies heavily on TRADE Agricultural products and industries are a major portion of Georgia’s exportsPeanutsTobaccoCottonSoybeansCornPoultryPaper and Forest ProductsManufactured goodsMachineryEXPORTS
10Goods and Services in GA During the 30’s and 40’s peanuts and pecans became very important to the state of Georgia.Nearly half the U.S. peanut crop comes from Georgia.
11Georgia’s Economic Growth and Development What is profit?How is profit an incentive for entrepreneurs?How do entrepreneurs take risks to develop new goods and services in order to start a new business?
12What is profit?Amount of money a person or business earns and has left over after all costs of production are paid
13What is an entrepreneur? Someone who starts a business or a company, taking great financial risks in the processThey take these risks in hopes of earning a profit.
15How do entrepreneurs take risks to develop new goods and services in order to start a new business? Entrepreneurs take financial risks! They invest large amounts of money into a new business in hopes that they will earn a profit! If they don’t earn a profit, their financial invest is lost!
171886, John Pemberton invented a new drink to cure headaches 1892, Asa Candler bought the rights to the drink for $2300 and began marketing “Coca-Cola” as a regular drink instead of as a medicineOne of the first entrepreneurs to understand the importance of national advertising resulting in Coke becoming a household name.In 1919, he sold the company to Ernest Woodruff for $25 million making a profit of $24,997,700.Four years later, Robert Woodruff took over and built Coke into what is today!
18The Home DepotFounded by Bernie Marcus and Arthur Blank in AtlantaBy 2004, profits exceeded $5 billionLocations in all 50 states and several foreign nationsArthur Blank is also the owner of the Atlanta Falcons as a result of his success with Home Depot
191927 - Created by Owen Cheatem in Augusta, GA Originally a lumber companyCurrently largest wholesaler of building products in North AmericaSecond largest producer of paper products
201924 – began as a crop-dusting business in Macon, GA Became a major airline under the leadership of C.E. Woolman1941, moved headquarters to Atlanta1st transatlantic flight in 1978Hard times due to economy, 9-11, etcHad to file for bankruptcy in 2003 and re-emerged from bankruptcy in 2007
211967 - Founded by Truett Cathy in Atlanta Original restaurant was called the Dwarf GrillOperates more than 1200 restaurants in 38 statesOver $1.7 billion in profitsOne of the nation’s most successful restaurant chains
22American Family Life Insurance (changed to Assurance) Company 1955 – founded in Columbus, GA by three brothers: John, Paul, and Bill AmosPioneered Cancer insurance in 1958National’s leader in supplemental health insuranceRated as one of the best companies in the nation to work forStill based in ColumbusOne of the most popular company mascots: the AFLAC DUCK
38Hmmm…What do you think state and local governments spend their money on???How do you think state and local governments make money???
39State and Local Spending Spend “millions of dollars” on employee salaries and services for citizensGovernment employees (state or municipal money)TeachersElected officialsLaw enforcementServices for citizensPolice and emergency servicesEducationMedical servicesTrash collection,Road construction
40How are choices made as to how the government will spend its money? Many services to fund, but revenues are limited (limited supply of money)A budget is used to organize the revenues and spendingA budget includes:Projected incomeProjected spendingServices that will receive moneyDebt affects a budgetThe greater the state’s debt, the less money for services and salaries.
41Factors that affect government spending… DebtThe greater the debt, spending decreasesPolitical PartiesRepublicans more conservative with spendingDemocrats more liberal with spendingTaxesThe higher the taxes, the more money the government has for spendingPopulationThe more people, the greater the demand for servicesMore tax payersConstituencies (a group of citizens an elected official represents and answers to)How a constituency feels “greatly affects how much a leader supports or opposes spending in certain areas”Opportunity CostGiving up an option in order to obtain the other option
42Opportunity Cost Examples… If the government chooses to fund a health care program, it must give up spending money on another program such as education or emergency services.What are a few opportunity cost choices you have had to make in the last two weeks?
56Money Management…Without a money management plan, you may possibly fall into debt.Debt is the amount of money that you owe.This occurs when you spend more money than you actually have.
57What is credit? Sometimes, debt isn’t a negative thing. For example, when you buy a house or car…You may borrow money from the bank or other lender and pay back the amount owed plus interest.Interest is normally based on a percentage of the amount owed.
58What happens when you are unable to pay back your loans??? When a home loan becomes too much for an individual or couple to pay back, the lender or bank can take back the property. This is known as foreclosure.The borrowers lose their house and any amount of money they have paid on their loan.If you become unable to pay your car payment, the lender can re-possess your property.All above can lead to a very low credit score.
59How can you affect the economy through your on personal money management? SHARE OUT!!!
60“When people don’t pay their loans, it hurts the economy because lenders make less money and, therefore, have less money to lend. As a result, not as many people can get the loans they need to buy houses, etc.”
61As a result…. There is a HUGE snowball effect…. Fewer people purchase homes…Income for realtors, contractors, car salesmen, etc decreases…Sales people make less commission…Waiters get fewer tips…And people begin losing JOBS!
64The amount of money that you owe to lenders is called what? A – creditB – interestC – bankruptcyD – debt
65Which of the following does a person need to know to plan an effective budget? A – Statewide interest ratesB – His or her credit scoreC - Personal incomeD – Adjustable rate mortgages
66People save money for all of the following reasons except… A – RetirementB – A specific item they want to buyC – Education (College)D – To win the lottery
67You should make wise money decisions because… A – You want to buy a video game.B – You want to go bankrupt.C – You want to lose your job.D – You want to be a good citizen and positively contribute to the economy and your community.