Economic Cycles The fluctuation of a capitalist economy

Slides:

Advertisements

Similar presentations

How big is the UK economy? The UK economy is the 7 th largest in the world, with an annual GDP of around £1.35 trillion, or £1350 billion, or £1,350,000,000,000.

Advertisements

Inflation Changes in Pricing. Price Comparisons $ $30, $110, $ $22,467 Mint - $67, $

Unit 7 - Inflation l Inflation Measures Common inflation measures are:  Consumer Price Index  Producer Price Index  GDP deflator Macroeconomics.

Chapter 2 Economic Activity.

Business Cycle Chapter 15. Definition and History Def. –A periodic but irregular up and down movement in production and jobs –Two phases (expansion and.

Unit A Business in a Changing World Section 1.04 Economic Indicators and the Business Cycle.

Economic Measurements Chapter 4

Macroeconomic Goals and Instruments

Notes: Inflation By: Mrs. Erin Cervi. Inflation Basics Inflation: an increase in the economy’s general price level. – As prices increase, purchasing power.

Economic Activity in a Changing World Chapter 3 pp Mr. Manning.

Chapter 6 Macroeconomics the Big Picture 12-1 Copyright  2008 by The McGraw-Hill Companies, Inc. All rights reserved.

Economics 7b The Business Cycle. The Business Cycle: The performance of the American economy changes over time. This is called the business cycle.

Intro Ch. 2 Economic Activity. Ch. 2-1 Measuring Economic Activity GDP- Gross Domestic Product- The total dollar value of all goods and services produced.

GO PANTHERS!!!!. Chapter 11, Section 2 What happened is inflation.

A. A general rise in prices. 1. When prices rise, a person’s ability to buy goods and services goes down, which decreases purchasing power.

Economics in History. The Business Cycle The Business Cycle: Short-run changes in the economy between expansion/growth and contraction/recession Boom.

Back to Table of Contents pp Chapter 3 Economic Activity in a Changing World.

Measuring the Economy. Vocabulary Gross Domestic Product (GDP) GDP per Capita Base Year Business Cycle Prosperity Recession Depression Recovery Inflation.

Economics Unit 3 Lesson 5: Inflation/Deflation. What Makes Money Important? 1. It’s a Medium of Exchange. Money is valuable because it is accepted in.

Economic Activity in a Changing World Chapter 3 pp

Goal #3 LIMIT INFLATION Country and Time- Zimbabwe, 2008 Annual Inflation Rate- 79,600,000,000% Time for Prices to Double hours Copyright ACDC Leadership.

Intro to Business 2-2. The Business Cycle  All economies experience good and bad economic periods  This economic shift between good and bad economic.

Coping with Economic Challenges

Inflation, Unemployment, and National Income: The Abridged Version

Keynesian and Supply Side Diagrams

Understand the role of business in the global economy

Calculating Nominal GDP, Real GDP, and Inflation

Natural Rate of Unemployment

2-2 Economic Conditions Change

I. The Circular Flow Model

Inflation Who wins & loses from inflation.

Business Cycle Essential Questions: Which indicators should members of the government look at when making economic policies? Why? How do we know how.

Measuring Economic Activity

Unemployment/Inflation Chapter 13

Presentation 1- Economic Growth

CHAPTER 1 INTRODUCTION TO MACROECONOMIC

GDP, Spending, and Economic Growth

MEASURING ECONOMIC ACTIVITY

Monetary Policy.

Inflation & Stagflation

Annual Inflation Rate- Time for Prices to Double-

Annual Inflation Rate- Time for Prices to Double-

A general increase in the price level for goods and services

Review Session 2 - Chapters 6-8

Challenges to the Free Market System

Business Cycle Essential Questions: Which indicators should members of the government look at when making economic policies? Why? How do we know how.

Ch. 12: U.S. Inflation, Unemployment and Business Cycles

Types of Inflation Monetary Policy.

Inflation INCREASE IN THE GENERAL LEVEL OF PRICES AND SERVICES

Krugman Section 6 Module 33

Inflation Chapter 8, Unit 4, Part IV.

Unit 2: Macro Measures 1.

Measuring the Economy’s Performance

Economic Activity in a Changing World Chapter 3 pp

Understand the role of business in the global economy.

2-Types of Inflation Demand-Pull Inflation: Cost-Push Inflation

Economic Measurements

INFLATION SSEMA1-You will illustrate the means by

Aggregate Supply and Demand

Understanding the Economy

Economic Activity CHAPTER Measuring Economic Activity

Economic Activity in a Changing World Chapter 3 pp

Inflation & Stagflation

Understand the role of business in the global economy.

Chapter Seven Inflation.

Economic Conditions Change Intro to Business 2-2.

Today’s Warm Up Take out Activity 8.2 from yesterday!

Presentation transcript:

Economic Cycles The fluctuation of a capitalist economy Divided into two main categories: Growth / Booms are associated with a strong and growing economy Increased employment, increased purchasing and investment, and moderate inflation Recessions are characterized by decreased economic growth Rising unemployment, decreased purchasing and investment

Economic Cycles

The law of supply and demand Prices in a capitalist economy are determined by the law of supply and demand. Supply and demand: the quantity of a product available at a given price + the level of consumer desire for that product The shift between supply and demand affects prices – causing inflation or deflation

Supply and Demand So easy even monkeys can do it. http://www.npr.org/templates/story/story.php?storyId=114068638&ft=1&f=94427042

INFLATION AND DEFLATION The value of a dollar does not stay the same. The actual value of a dollar is judged by the amount of a product that can be bought.

Inflation The rate at which the price for goods and services rises; causes the purchasing power of a dollar to fall. As inflation occurs, every dollar will buy a smaller percentage. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year. During World War II, you could buy a loaf of bread for $0.15, a new car for less than $1,000 and an average house for $5,000. Slow and steady inflation is a good thing since it represents a growing economy The more products being purchased, the more jobs there will be in retail and manufacturing

Causes of Inflation Demand-Pull Inflation - "too much money chasing too few goods." If demand is growing faster than supply, prices will increase. Example: when a new video game system is first released, the price skyrockets (people sell it on Ebay for double or triple the price). As more product is available, the price decreases. Cost-Push Inflation - When a company’s costs go up, they increase prices to maintain profit margins. Example: When the price of a barrel of oil increases, gas prices increase.

Deflation A general decline in prices, often caused by a reduction in the supply of money Too much product and not enough money A reduction in government, personal or investment spending all lead to less money in the economy Causes increased unemployment since there is a lower level of demand in the economy.

INFLATION CALCULATOR http://146.142.4.24/cgi-bin/cpicalc.pl Better website! Has current information on US inflation rate http://www.usinflationcalculator.com/ Massive inflation?!!! http://www.guardian.co.uk/world/2008/oct/09/zimbabwe Current inflation rate: http://inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp