1. Macro Measures and International Trade
Unit 2:
Macro Measures and International Trade 1

2. THE BUSINESS CYCLE

3. Define Macroeconomics
What are the 3 economic goals that all countries have
Identify the 3 key parts of the definition of GDP
How do we use GDP
Identify w hat is NOT included in GDP
List the 4 components of GDP
Define Inflation
Explain the difference between Nominal and Real GDP
Explain Real GDP per Capita
Name 10 Disney Movies

4. The Roller Coaster Ride
Paul Solman Video:
The Roller Coaster Ride 4

5. The national economy fluctuates resulting in periods of boom and bust.
THE BUSINESS CYCLE
The national economy fluctuates resulting in periods of boom and bust.
Inflation
Unemployment
Full employment
A Recession is 6 month period of decline in output, income, employment, and trade. (If really bad…then depression)

6. 200 Years of the Business Cycle
Why is the business cycle like a roller coaster?
How do wars affect the economy?

7. The Business Cycle Why does the economy fluctuate?
Retailer and Producers send misleading information about consumer demand.
Advances in tech, productivity, or resources.
Outside influences (wars, supply shocks, panic).
Who cares?
Macroeconomics measures these fluctuations and guides policies to keep the economy stable.
The government has the responsibility to:
Promote long-term growth.
Prevent unemployment (resulting from a bust).
Prevent inflation (resulting form a boom).

9. 2010 GDP Growth Rate= 2.8%

10. What is Economic Growth?
An increase in real GDP over time
An increase in real GDP per capita over time (usually used to determine standard of living)
Why is economic growth the goal of every society?
Provides better goods and services
Increases wages and standard of living
Allows more leisure time
Economy can better meet wants

11. Connection to PPC The shifters of the PPC affect GDP
The same information shown on the business cycle can be shown on a production possibilities curve.
Full employment
Unemployment
Inflation
The shifters of the PPC affect GDP
Change in quantity/quality of resources
Changes in technology
Changes in trade