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We will be using Cornell Note Taking Format Today! Economic Growth: Economic Growth: Full Speed Ahead!
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Unit Five: Learning Objectives: North Clackamas School District Social Studies Priority Standards: Econ 50. Explain how economic indicators (GDP, CPI, Inflation and Unemployment) describe the condition of the economy.
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Lesson Three: Daily Learning Target I Can define and explain in writing the following key Economic concepts: The Federal Reserve Bank (Review) The Business Cycle Recession Depression Expansion How the Fed makes monetary policy
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The Fed The Federal Reserve Bank is commonly referred to as the “Fed.” The Federal Reserve Bank is commonly referred to as the “Fed.” The Federal Reserve Bank can make loans to banks, raise or lower interest rates, and require banks to hold adequate reserves. The Federal Reserve Bank can make loans to banks, raise or lower interest rates, and require banks to hold adequate reserves. The Fed helps banks across America. The Fed helps banks across America. No Dough Bank
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Destroy/Issue paper notes The Fed clears 40%; The Fed clears 40%; Banks clear rest electronically.
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$97.50 +30% The Fed controls the banks’ ability to create new money to ensure the economy doesn’t get too much money, nor too little. Overfed Fed just right 1980 1983 $75.00 Money Prices Underfed And – so it is with money. Not too much, not too little.
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Level of business activity Expansion GROWTH TREND
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75% of Africans get by on less than $2 a day.
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No Money For Real Capital No Money For Saving No New Dev elopmen t Poverty Low Per Capita Income
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Real Capital
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Size of employed labor force Quantity of real capital Discovery of new raw materials Average hours of work Increase in inputs [such as land, labor and capital] [33%] Technological advance Education and training Use resources in the least costly way [Productive efficiency] Allocate resources among production techniques that produce goods/services that maximize society’s well-being. Increase productivity of these inputs [66%] Real GDP x =
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10 inch image would cost $4,526 in 2013 12 inch image would cost $6,485 in 2013 20 inch image would cost $23,282 in 2013 12 inch image $695 20 inch image $2,495
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A business cycle is a period of economic expansion followed by a period of contraction.
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Recessions and Depressions Each phase of the business cycle is determined by monitoring Gross Domestic Product. A contraction that lasts for at least six months is called a recession. A particularly severe and long contraction is called a depression.
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June, 2009 18
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Four Phases of the Business Cycle Level of business activity
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One Cycle [Real GDP per year] Time [Have averaged 5-6 years] Expansion
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Think of it as a rollercoaster!
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B u s i n e s s C y c l e s Real GDP ‘80‘85 90 ‘90 4600 5200 6000 82
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Expansion
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“You look good. You look verrrry good.” 1 st date Jealousy sets in Gets engaged She goes off to college. He uses the meeting line on unsuspecting freshmen girls You decide to get married Baby-5 months later But with education a job is gained as well as a new house You become a happy family Happily ever after One loses a job
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[“The leading indicators have predicted 12 of the last 16 recessions”] “ Barometer Of The Future” “Like taking the blood pressure of the economy” [3-6 months] “Where we are heading”
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We are afraid we might lose our job & need some of the fish food money. Little food, little water
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The best way to help yourself in a time of recession……… We all know the real path to success & happiness in life is to? Marry a Kardashian!
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The End
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