Introduction  America’s economy is a huge economy.  Computers and other technologies predict whether economies will shrink or expand.

Tracking Business Cycle  Macroeconomics is the study of the behavior and decision making of entire economies.  Microeconomics is the study of the economic behavior and decision making of small units( individuals, families and business).  Business cycle is a period of macroeconomic expansion followed by a period of contraction.

Business Cycle  Free enterprise systems are determined by economic decisions.  Factors such as prices, production and consumption are made by individuals and business acting in their own self- behavior.  Determines our economic lives every day.

Promoting Economic Strength  Government creates public policies that aim to stabilize the economy.  Pursue 3 main outcomes to stabilize the economy : high employment, steady growth & stable prices.  1 aim of federal policy is to provide jobs for everyone who is able to work.  4 to 6 % unemployment is the ideal unemployment rate.

Growth & Stability  GDP is the measure of economic growth.  Stability gives the consumers, producers and investors confidence in the economy.  Sign of economic stability is a nations bank health.  The govt monitors and regulates banks.  Govt regulations protect depositors deposits.

Technology & Productivity  America has the highest GDP in the world.  Increasing productivity increases GDP.  Technology is the process used to produce a good or service.  Improvements in technology allows more output using the same or less resources.

Governments Role  Provides incentive for innovations.  Federal agencies fund research.  Granting patents and copyright laws allow inventors to make money in the free market.  Patents are good for 20 years.