1. The Main Idea Throughout the years, the U.S. economic system has changed. Each change affected what was produced and how people were employed. To gauge the health of our economic system, we use a variety of economic indicators. 2.1

2. Key Concepts The Changing U.S. Economy Measuring Economic Activity 2.1

3. Who has fat stacks? Who thinks they have the most money on them right now? Who is the tallest in here? Who has the highest GPA? 2.1

4. Measuring Economic Activity Economic indicators measure things such as: how much a country is producing whether the economy is growing how the economy compares to other countries 2.1

5. Gross Domestic Product gross domestic product (GDP) The total dollar value of all final goods and services produced in a country during one year. Measuring gross domestic product (GDP), involves computing the sum of goods and services sold to businesses, consumers, the government, and other countries. 2.1

6. Components of GDP – what goes into it? 1.Consumer spending for food, clothing, housing and other spending. 2.Business spending for buildings, equipment, and inventory items 3.Government spending to pay employees and to buy supplies and other goods and services 2.1

7. Components of GDP (cont’d) 4. The exports of a country less (MINUS) the imports into the country Ex: Exports – Imports = the money you can count towards your GDP USDebtClock 2.1

9. What counts towards GDP? Ex – You are out mowing your lawn GDP doesn’t include value of work you do for yourself. BUT included in GDP is everything you bought to cut your lawn. 2.1

10. What doesn’t count towards GDP? Only final goods are counted when you measure GDP Ex: Only a finished car is measured in GDP, everything that went into that car wasn’t counted – ex - the steel and fabric Intermediate goods would be counted twice (Steel and fabric) 2.1

11. GDP per capita Another way to measure economic growth is GDP per capita. Calculated by: GDP  ÷ total population. GDP per capita Output per person 2.1

12. GDP per capita Reminder: Calculated by- GDP  ÷ total population. USDebtClock 2.1

13. *155+/- million people work in the US Labor force consists of all people over age 16 who are actively working or are seeking work Unemployment rate is the portion of people in the labor force who aren’t working. Employment 2.1

14. Labor force – I don’t get it Labor Force Unemployed Not part of the Labor force Students, retired people, people who can’t work or don’t want to 2.1

15. Employment People are “unemployed” if: 1.They are looking for work 2.Willing/able to work 3.But can’t find a job Unemployment rate The portion of people in the labor force who are not working 2.1

16. Employment The unemployment rate measures the number of people who are able and willing to work but cannot find work during a given period. Unfortunately, not everyone is able/willing to work Students, retired people, and others who cannot or do not wish to work are NOT part of the labor force!!! 2.1

17. Types of Unemployment (Contd) Structural – new technology replaces workers, requiring new skills or companies merge and eliminate jobs Cyclical – the entire economy slows down Try finding our current unemployment rateunemployment rate 2.1

18. Productivity 1890’s average worker put in about 60 hours of work in a week Now we work around 40 hours a week but we produce WAY more goods and services….how is this? –Technology –Management techniques –Better worker training 2.1

19. Productivity A vital source of economic growth is an increase in output per worker. productivity The production output in relation to a unit of input (how many cans of chicken noodle soup can be produced with the number of staff working at the time) 2.1

20. Other factors of Economic Growth Personal Income Personal income funds provide the foundation for buying needed goods and services. Personal income Salaries and wages as well as investment income and gov’t payments to individuals. 2.1

21. Retail Sales On a monthly basis, the U.S. Dept of Commerce measures retail sales by consumers. Increasing retail sales usually points towards economic growth Retail sales Sales of durable and nondurable goods bought by consumers 2.1

22. Retail Sales Main items measure for estimating retail sales include: automobiles, building materials, furniture, gasoline, clothing as well as purchases from restaurants, dept. stores, and food and drug stores 2.1

23. Retail Sales Durable and nondurable? What does that mean? Durable – –a consumer good that typically lasts longer than three years –Furniture, jewelry, cars, appliances Nondurable – –a consumer good that typically lasts less than three years –Food, cosmetics, medicines, clothes, shoes, small electronics 2.1

24. Partner Activity On paper or electronically, list all the consumer goods and services you used from yesterday morning until you went to bed (list durable goods together and nondurable goods together) Count them up when finished 2.1

25. Group Activity –Country –Flag –Map of where country is located –Population –GDP –GDP per capita –Unemployment Rate –Personal Income Level –% change in each category from 2010 to 2014 (see next slide for example) –Works cited page……don’t forget 2.1 Get a partner In presentation software, create a presentation about the countries given to you and include:

26. Calculating % Change (New # – Old #) x 100 Old # 2010 – 31,306Percent Change = 53% 2013 – 47,929 2.1

27. You are a purchasing agent for a large furniture manufacturer. You have received several bids from lumber companies for a supply of teak, a very dense and decay-resistant type of wood. The lowest bid comes from a lumber company that has been known to abuse the environment. Decision Making How does the lumber company’s reputation affect your decision? Explain your answer. 2.1

28. Answer Students might suggest that all aspects of the company’s reputation should be considered before making a decision to buy from the company. 2.1

29. 1. What do economic indicators measure? Economic indicators measure the economic health of the nation. 2.1

30. 2. How do we find GDP per capita? GDP ÷ by total population of a country 2.1

31. 3. What are the main sources of personal income? Wages, salaries, investment income, and gov’t payments. 2.1