1. PLEASE DO NOW 1.Take Out Your Bellringers 2.Take Out Notes #12, 13, and 14 (will need for today’s review) 3.Announcements: Exam on Notes #12-14 tomorrow Homework: Finish the Poverty worksheet. If I can get 10 volunteers to share their thoughts on “How To Deal With Poverty,” then the essay paper will be due on Friday rather than tomorrow.

2. Bellringer D-15 In 2-3 sentences, summarize the response to the Poverty Research Paper.

3. 1)There are several ways to measure the health of an economy. Which one measures the “dollar value of all final goods & services produced within a country’s borders in a given year? (NO # 12) ANSWER: Gross Domestic Product (G.D.P.)

4. 2)True or False: All “free market economies” experience the “Business Cycle?” (NO #13 ) ANSWER: True

5. 3) What type of unemployment occurs every time there is a major shift in the economy? (NO #14) ANSWER: 1.Structural unemployment 2.For example, when the U.S. shifted from an agricultural economy to a manufacturing economy, many farmers were unemployed.

6. 4)There are 2 major ways of calculating G.D.P. One way is to add up the incomes of each working citizen. What is this approach called? (NO # 12) ANSWER: The Income Approach This approach assumes that the selling price of all goods & services reflects the $$$ paid to all workers that helped make it.

7. 5) Name 2-5 things that might happen to an economy that is experiencing a “contraction” during the business cycle. (NO #13 ) ANSWER: 1)Decreased production of goods/service 2)Decreased sales of goods/services 3)Rising unemployment 4)Failure of businesses 5)Lack of business expansion

8. 6)This term describes someone that is “seeking a job, but is not able to obtain a job”? (NO #14) ANSWER: Unemployed

9. 7) As a measurement, “Gross Domestic Product” does not factor in or consider “Intermediate Products.” What are “intermediate Products? (NO #12 ) ANSWER: 1.Intermediate Products = are products used to make other products that are already counted in GDP.

10. 8) What are the 4 cycles of the Business Cycle? (NO #13 ) ANSWER: 1)Expansion 2)Peak 3)Contraction 4)Trough

11. 9)What 3 things need to take place before an economy can be labeled as “fully employed?” (NO #14 ) ANSWER: 1.Unemployment rate must be at or below 3.5% 2.The economy must be growing (in the expansion phase or GDP rising) 3.All factors of production (land, labor, capital, entrepreneurialship) is being used efficiently.

12. 10) What is a real-life example of an “intermediate product?” Please explain. (NO # 12) ANSWER: The tires in a new car would be an intermediate product. Why? Because the entire car is what will be counted in GDP, not the tires. The tires HELP the car to be a “final product”

13. 11) What is the proper label for an economy that is experiencing the following: --A steady decline in GDP --Steady rise in prices --A rise in the unemployment rate (NO #13 ) ANSWER: Stagflation

14. 12)What is “globalization?” (NO #14) ANSWER: 1.It is a process of INTEGRATION and INTERACTION among people, companies, and governments of different nations. 2.In other words, it occurs when the economies of different countries become more involved with each other.

15. 13) As a measurement, “Gross Domestic Product” does not factor in or consider “Secondhand Sales.” What are “Secondhand Sales?” (NO # 12) ANSWER: 1.Secondhand Sales= are used goods that are not being sold for the first time. 2.Used items do not add to an economy’s new production.

16. 14)When interest rates are HIGH, what is the normal reaction of businesses and consumers? (NO #13) ANSWER: 1.Businesses are LESS likely to borrow money for expansion purposes 2.Consumers are LESS likely to borrow money for personal spending.

17. 15)What type of unemployment is changes according to phases of the business cycle? (NO #14) ANSWER: 1.Cyclical Unemployment 2.During the “expansion” phase, unemployment tends to be low. 3.During the “contraction” phase, unemployment tends to be high.

18. 16) As a measurement, “Gross Domestic Product” does not factor in or consider “Non-Market Activities.” What are “Non-Market Activities?” (NO #12 ) ANSWER: 1.Non-Market Activities= are goods & services that people PRODUCE FOR THEMSELVES, without the intent of selling those things for other people.

19. 17) What is the proper label for the “cost that banks charge to borrow money (it is also expressed by a percentage) ? (NO #13 ) ANSWER: Interest Rate

20. 18) Why does “seasonal unemployment” occur? In other words, why does it happen? (NO #14) ANSWER: 1.Because some industries are destined to shut down (suspend production) during certain periods of the year. 2.Example: Ski/snowboarding resorts shut down during the Summer months.

21. 19) As a measurement, Gross Domestic Product does not factor in or consider “Underground Economies.” What are “Underground Economies?” (NO #12) ANSWER: 1.Underground Economies= Activities that produce goods/services, then sold without ever being reported to the government.

22. 20)When interest rates are LOW, what is the normal reaction of businesses and consumers? (NO #13) ANSWER: 1.Businesses are MORE likely to borrow money for expansion purposes 2.Consumers are MORE likely to borrow money for personal spending.

23. 21)What are the 4 types of unemployment? (NO #14) ANSWER: 1.Frictional Unemployment 2.Seasonal Unemployment 3.Cyclical Unemployment 4.Structural unemployment

24. 22)True/False: “Underground Activities” are always illegal because they are never reported to the government? (NO # 12) ANSWER: False! Underground Activities can be either Legal or Illegal. Selling your grad tickets is not illegal. Selling crack cocaine is illegal.

25. 23)Name one difference between a “Recession” and a “Depression”? (NO #13 ) ANSWER: 1.Depressions last longer than Recessions 2.Depressions are more severe than Recessions

26. 24)Explain the “Demand-Pull” Theory of inflation. (NO #14) ANSWER: Inflation occurs when demand for goods & services EXCEEDS existing supplies

27. 25) “Markets that provide illegal goods/services without ever reporting it to the government” are known as……… (2 words needed) (NO # 12)? ANSWER: Black Markets

28. 26)What is an “external shock?” (NO #13 ) ANSWER: 1.Some kind of event that can cause major changes to an economy, in either positive or negative ways. 2.Example of a positive shock: the discovery of a new planet that has fresh water.

29. 27) Explain the Quantity Theory of inflation? (NO #14) ANSWER: Too much $$$ circulating in the economy will cause inflation of price levels.

30. 28) “The Extent to which people are happy, comfortable, safe, and have leisure time” is known as… (3 words needed)? (NO #12 ) ANSWER: Quality Of Life

31. 29) What is it called when an economy experiences the following: --A decline in G.D.P. for at least 6 consecutive months --Unemployment levels float between 6% - 10%. (NO #13 ) ANSWER: A Recession

32. 30)Which term describes the following: “A general increase in the prices of goods & services?” (NO #14) ANSWER: Inflation

33. 31)There are 2 major ways of calculating G.D.P. One way is to add up the selling price of all goods/services that an economy sold. What is this approach called? (NO # 12) ANSWER: The Expenditure Approach If an economy makes nothing but soap bars, and the economy only sold 7 soap bars for two dollars each, then the GDP would equal $14.

34. 32) What are 5 things that MIGHT cause an economy to experience “structural unemployment?” (NO #14) ANSWER: 1.Development of new technology 2.Changes in consumer demand 3.Globalization 4.Lack of education 5.Discovery of new resources.

35. THERE ARE ONLY TWO QUESTIONS LEFT ANSWER:

36. 33)Which part of government is responsible for calculating the nation’s G.D.P.? (NO #14) ANSWER: The Department of Commerce, which is a federal agency run by the executive branch.

37. 34) Explain the “Cost-Push” Theory Of inflation? (NO #14) ANSWER: 1.Something has caused the COST OF PRODUCTION to rise. 2.Inflation occurs because producers have chosen to raise the price of their products in order to cover the increased cost of production.