1. Economics: Unit 5: Lesson 1 Diagnosing the Economy: Performance

2. What is an economy?

3. What is GDP?
GDP is an important indicator to the flow of the economy because it is the amount of money spent or earned in a country in an entire year.

4. Expenditure Approach
One method used to calculate GDP is to estimate the annual expenditures on four categories of final goods and services:

5. Income Approach
Another method calculates GDP by adding up all the incomes in the economy.

6. What is a business cycle?
Business cycles show how well goods and services are flowing in an economy.
The business cycle consists of four phases:
Expansion
Peak
Contraction
Trough
Checkpoint Answer: Expansion, peak, contraction, and trough

7. Contractions
There are three types of contractions, each with different characteristics.
A recession is a prolonged economic contraction that generally lasts form 6 to 18 months and is marked by a high unemployment rate.
A depression is a recession that is especially long and severe characterized by high unemployment and low economic output.
Stagflation is a decline in real GDP combined with a rise in price level, or inflation.

8. Variables Affecting Business Cycles
Interest Rates and Credit
Consumers often use credit to buy new cars, home, electronics, and vacations. If the interest rates on these goods rise, consumers are less likely to buy them.
Consumer Expectations
High consumer confidence, though, will lead to people buying more goods, pushing up GDP.
External Shock
Negative external shocks, like war breaking out in a country where U.S. banks and businesses have invested heavily, can have a great effect on business, causing GDP to decline
Business Investment
When the economy is expanding, business investment increases, which in turn increases GDP and helps maintain the expansion.

9. Econ Ed Link – Business Cycle Quiz

10. Rotation Activity
When I say go, you will form a pod with your assigned rotating groups.
I will hand out the first activity.
After 7 minutes, you will add your activity to your rotation packet and move to the next activity. (Leave any extra activity sheets at the pod.)
We will complete three rotations and discuss the various sections as a class.
Groups will be graded based on the activities kept in the rotation packet.

11. 2nd Period Rotating Groups
Group 1: Kevonte, Reagan, Navaja, Zach
Group 2: Khaleigha, Cari, Tanisha, Cassidy
Group 3: DaKorvian, Brendan, Izzy, Ashlee
Group 4: Hannah, Ariel, Aaron, Alexa, Mariah
Group 5: Darrion, Kristian, Nathan, Ashley, Chandera
Group 6: Alexa, Danny, D’Marco, TyJae
Group 7: Trenton, Savasia, Tyler, Bry’Andria

12. 8th Period Rotating Groups
Group 1: Jordan, Gage
Group 2: John, William
Group 3: Mariah, Kelsey
Group 4: Hannah, Elizabeth
Group 5: Warrick, Jason
Group 6: Daivanda, Cherita, Jasmine

13. 5th Period Rotating Groups
Group 1: Jordyn, Haley, Emily, Megan
Group 2: Nautica, Janay, Devon, Adam
Group 3: Chad, Keanon, Brianna, Ashley
Group 4: Idarrion, Brittney, Hannah, Carrington
Group 5: Alexis M, Perry, Emily, Damon, DeAngelo
Group 6: Azairiyia, Austin, Alexis B, Asia, Colin
Group 7: Aireon, Alysa, Emonyae, Celeste

14. Business Cycle Rotation Discussion
What did you learn?

15. Business Cycle Forecasting
Checkpoint: Why is it difficult to predict business cycles?
To predict the next phase of a business cycle, forecasters must anticipate movements in real GDP before they occur.
Economists use leading indicators to help them make these predictions.
Checkpoint Answer: Economists must anticipate movements in real GDP before they occur.

16. Economic Indicators Stock Market Income and Wages
Manufacturing Activity
Inventory Levels of Businesses
Retail Sales
Building Permits
Housing Market
Level of New Business Startups
Changes in GDP
Income and Wages
Unemployment Rate
Consumer Price Index(Inflation)
Interest Rates
Corporate Profits
Balance of Trade
Consumer Sentiment
Federal Budget

17. Economic Indicator Presentation
Assignment
Economic Indicator Presentation