1. 8th Grade Economics

2. On you handout, write down 5
What does the
term ECONOMICS
mean to you?
On you handout, write down 5
words / thoughts that come to mind when you hear the term “economics”.

3. What is Economics?
The use of limited resources such as money, raw materials, labor, etc by nations and states

4. Georgia’s Economy How Georgia produces How much debt Georgia has
How many Georgia citizens are employed

5. The better a state’s economy, the happier and secure
Economic Growth
Always encouraged because…
The better a state’s economy, the happier and secure
its citizens tend to be!
What do you know about the current state of our economy in Georgia? The U.S.?

6. What is free trade?
Importing and exporting products between nations or regions
Imports
Products coming into Georgia
Exports
Products leaving Georgia

7. Benefits of
TRADE
Allows Georgia to earn money by selling to the rest of the world, while also purchasing products from other places that Georgians need or want.

8. Why was Georgia founded?
England founded Georgia to produce goods for trade
Savannah Port
Cotton
Rice
Indigo
Lumber
Tobacco
International trade was essential to Georgia’s survival during the 1800’s.

9. Today… Georgia relies heavily on TRADE
Agricultural products and industries are a major portion of Georgia’s exports
Peanuts
Tobacco
Cotton
Soybeans
Corn
Poultry
Paper and Forest Products
Manufactured goods
Machinery
EXPORTS

10. Goods 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.

11. Georgia’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?

12. What is profit?
Amount of money a person or business earns and has left over after all costs of production are paid

13. What is an entrepreneur?
Someone who starts a business or a company, taking great financial risks in the process
They take these risks in hopes of earning a profit.

14. How is profit an incentive for entrepreneurs?

15. How 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!

16. Famous Georgian
Entrepreneurs

17. 1886, 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 medicine
One 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!

18. The Home Depot
Founded by Bernie Marcus and Arthur Blank in Atlanta
By 2004, profits exceeded $5 billion
Locations in all 50 states and several foreign nations
Arthur Blank is also the owner of the Atlanta Falcons as a result of his success with Home Depot

19. 1927 - Created by Owen Cheatem in Augusta, GA
Originally a lumber company
Currently largest wholesaler of building products in North America
Second largest producer of paper products

20. 1924 – began as a crop-dusting business in Macon, GA
Became a major airline under the leadership of C.E. Woolman
1941, moved headquarters to Atlanta
1st transatlantic flight in 1978
Hard times due to economy, 9-11, etc
Had to file for bankruptcy in 2003 and re-emerged from bankruptcy in 2007

21. 1967 - Founded by Truett Cathy in Atlanta
Original restaurant was called the Dwarf Grill
Operates more than 1200 restaurants in 38 states
Over $1.7 billion in profits
One of the nation’s most successful restaurant chains

22. American Family Life Insurance (changed to Assurance) Company
1955 – founded in Columbus, GA by three brothers: John, Paul, and Bill Amos
Pioneered Cancer insurance in 1958
National’s leader in supplemental health insurance
Rated as one of the best companies in the nation to work for
Still based in Columbus
One of the most popular company mascots: the AFLAC DUCK

23. Guess Who!

24. Who am I? This product was initially created to be a medicine.
In 1892, Asa Candler purchased this company for $ In turn, he sold the company for $25,000,000 in 1919!

26. Guess Who 1978 - Founded by Bernie Marcus and Arthur Blank in Atlanta
By 2004, profits exceeded $5 billion
Locations in all 50 states and several foreign nations

28. Who am I? Georgia company Originally a lumber company
Now second largest producer of paper products

30. Who am I? Atlanta based company Began as a crop dusting business
1st transatlantic flight in 1978
Filed for bankruptcy in 2003 due to economic issues

32. Who am I? Atlanta based Founded by Truett Cathy
Original restaurant was called the Dwarf Grill
Over $1.7 billion in profit

34. Who am I? Georgia based company Supplemental insurance
Pioneered cancer insurance
Most famous company mascot

36. SPENDING AND REVENUE

37. SPENDING

38. Hmmm…
What do you think state and local governments spend their money on???
How do you think state and local governments make money???

39. State and Local Spending
Spend “millions of dollars” on employee salaries and services for citizens
Government employees (state or municipal money)
Teachers
Elected officials
Law enforcement
Services for citizens
Police and emergency services
Education
Medical services
Trash collection,
Road construction

40. How 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 spending
A budget includes:
Projected income
Projected spending
Services that will receive money
Debt affects a budget
The greater the state’s debt, the less money for services and salaries.

41. Factors that affect government spending…
Debt
The greater the debt, spending decreases
Political Parties
Republicans  more conservative with spending
Democrats  more liberal with spending
Taxes
The higher the taxes, the more money the government has for spending
Population
The more people, the greater the demand for services
More tax payers
Constituencies (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 Cost
Giving up an option in order to obtain the other option

42. Opportunity 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?

43. REVENUE

44. Government Revenue
Revenue is the money the government takes in to fund its spending
Two revenue categories
Fees, Fines, and Grants
Taxes

45. Fees, Fines, and Grants

46. Fees
Money that you pay directly for a service, license, or to register for something, etc
EX:
MARTA fare
Toll Road fare
Business license fee
Driver’s license fee

47. Fines Money paid as a punishment Traffic violations Littering
Failure to abide by local ordinances
Failure to obey state regulations

48. Federal Grants
Money the federal government gives to the state or local government in order to help address a specific issue
Road improvements
School improvements
Environment protection

49. Taxes

50. Taxes Money that citizens and businesses must pay the government
Most common way the state and local governments raise money
Property Tax
Income Tax

51. Sales Tax Tax on products you buy Examples
Normally a percentage of the total cost
Examples
CD’s
Video Games
Clothing
Shoes

52. Property Tax Taxes on property you own
Based on the value of your property
Examples of property that will be taxed:
Cars
Homes
Other structures

53. Personal Income Tax
Paid to the State of Georgia and the Federal government
Based on how much money a person makes
Comes out of a person’s paycheck

54. Personal Money
Management

55. EQ:
How can you
manage your money
sucessfully?

56. Money 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.

57. What 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.

58. What 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.

59. How 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.”

61. As 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!

62. Budget Activity

63. Saving and Spending
Activity

64. The amount of money that you owe to lenders is called what?
A – credit
B – interest
C – bankruptcy
D – debt

65. Which of the following does a person need to know to plan an effective budget?
A – Statewide interest rates
B – His or her credit score
C - Personal income
D – Adjustable rate mortgages

66. People save money for all of the following reasons except…
A – Retirement
B – A specific item they want to buy
C – Education (College)
D – To win the lottery

67. You 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.