Economic Performance

Gross Domestic Product (GDP) Measure of National Output Multiplying all final goods and services produced in a 12-month period by prices Is somewhat limited because it does not measure secondhand sales and the underground economy.

What is the underground economy? Jobs that are under the table Criminal oriented activity including drugs, gambling, smuggling, prostitution, and counterfeiting.

Disposable Personal Income The total amount of income going to consumers before individual income taxes are subtracted. Disposable Personal Income The total income the consumer sector has at its disposal.

Inflation The rise in the general price level. Determined by a price index. Choose a base year. Select a market basket of goods. What percentage has the market basket of goods increased by year.

Consumer Price Index Reports changes in the prices of thousands consumer goods and services.

Economic Growth Beginning in 1991, the United States enjoyed the longest period of prosperity in its history, with the economy growing at a robust 3.9 percent in 1999. Economic growth is best measured by real GDP per Capita: That is GDP, adjusted for inflation, divided by the population.

Importance of Economic Growth Increases standard of living Increases the tax base allowing government to provide services Helps reduce poverty

Factors influencing economic growth Available Natural Resources High capital to labor ratio Skilled and growing labor force Entrepreneurs contribute to economic growth.

Economic Growth facts Economic growth is cyclical, goes up and down Recession- Real GDP declines for two quarters in a row. Expansion- A period of recovery from a recession.

Leading Economic Indicators Statistics that economists monitor to assess and predict trends in the economy.

Unemployment The percentage of unemployed people divided by the total number of people in the civilian work force. Unemployment rate does not include those discouraged from finding work or those working part time that wish to work full-time Happens for many reasons, many feel our region has been hurt by NAFTA.

Poverty Having an income below a certain level (Poverty Guidelines) More than 12 percent of the population lives in poverty

CPI (Consumer Price Index) http://www.bls.gov/cpi/cpid1310.pdf http://www.bls.gov/cpi/cpi_dr.htm#2013

Poverty Rates http://www.census.gov/prod/2013pubs/acsbr12-01.pdf