1. Factors Affecting the U.S. Economy
Miss Smith
7th Grade Civics
*pgs (21.2)

2. Stages of the Business Cycle
Stage 1: Expansion
Stage 2: Peak
Stage 3: Contraction
Stage 4: Trough
What stage of the business cycle generally follows a trough? An expansion

3. Influences on the Business Cycle
Business Investment
Money and Credit
Public Opinion
International Events
What factors might influence public opinion about the economy? Whether people have high-paying, secure jobs; whether many inexpensive goods are available; current events; the actions of businesses or the government

4. Predicting the Business Cycle
Leading indicators- signs that come before major changes in the business cycle
Coincident indicators- signs that show economists how the economy is doing at the present time
Lagging indicators- economic signs that follow major changes in the business cycle
In what ways do leading, coincident, and lagging indicators help economists understand the economy? Help predict future economic changes; coincident: tell whether an upturn or downturn has begun; lagging: help determine how long the current phase of the business cycle may last

5. Human and Capital Resources
*Do NOT write
Why might some American companies want to open factories in foreign countries?
Why might a company choose to remain in the United States and hire American workers?
To reduce labor costs and increase profits
It might need to be in a certain location to provide a good or service, needs skills that American workers have, or wish to help provide jobs to American workers

6. Current Events and the Economy
*Do NOT write
How did the September 11 attacks affect the American economy?
In what ways can weather affect the economy?
They affected many businesses in NYC, caused the NYSE to close, and hurt the airline industry
Hurricanes can disrupt crude oil and gasoline production. Hot or cold weather might change the demand for certain products and services, such as air conditioners or snow removal