Economics Economics is the social science that analyzes: Production Day 1 Economics Economics is the social science that analyzes: Production Distribution Consumption of goods and services

Economic Concept The more we Spend The more we Produce The more our country produces The stronger and more stable our country is

GOOD

Gross Domestic Product Gross – Total Domestic – Home, within the country Product – What is made How to measure an Economy Is the Economy providing goods and service? How much? Not looking at what is made Looking at what is purchased

Gross Domestic Product Why measure the economy? If the economy is doing well, then…. The citizens of the economy are doing well Can the opposite of this statement be justified?

GDP Formula Y = C + I + E + G Y = Gross Domestic Product C = Consumer Spending I = Investment (by businesses) E = Exports – Imports G = Government Spending

E Exports – Imports Export = What a country SELLS to another country Import = What a country BUYS to another country Export more than Import The economy is producing more goods than other countries Import more than Export The economy is producing less goods than other countries E

I GDP Investment by Business Not saving , investing in the business Spending money Buy new machines New Computers and Software Hire engineers Hire Workers Build a new Warehouse

GDP Formula Y = C + I + E + G Y = Gross Domestic Product C = Consumer Spending I = Investment (by businesses) E = Exports – Imports G = Government Spending

Not a standard measure of living

GDP High GDP = Stable and Strong Country People have money to spend LOW GDP = unstable and weak Country People have less money to spend