1. Economics Part VI SSEF 4: The student will compare and contrast different economic systems, and explain how they answer the three basic economic questions of what to produce, how to produce and for who to produce.

2. Guiding the Economy _______ and the President enact laws that impact fiscal policy. Government __________ are often planned to guide the economy.

3. Guiding the Economy The ________Reserve (“the Fed”) is a government agency that guides the _____.

4. Guiding the Economy The Federal Reserve Regulates the amount of money in circulation Controls interest rates Controls the amount of money loaned State and local governments also take steps to influence their economies Graphic Organizer

5. Four Stages of the Business Cycle business cycle the rise and fall of _____ activity The ________of one country can affect other trading partners.

6. Business Cycle Model Figure 3.1

7. Prosperity Prosperity results from low ________, high production of goods and services, and the opening of new _________. prosperity a peak of ________activity

8. Graphic Organizer Characteristics of Prosperity Higher _________ ______ demand for goods to be produced More people buy _______, which creates work for builders People buy more goods from other _______, which benefits those countries

9. Recession During a recession, ______ produce less, so they need fewer workers. recession when ________activity slows down

10. Graphic Organizer Characteristics of a Recession Businesses ________less ___________ increases People have less money to _______ Fewer goods and services are _________ The GDP _________

11. Recession A _________ in one industry can cause a ripple effect throughout the entire ________.

12. Depression A depression can be limited to one _______ but usually spreads to related ________. depression a deep _________

13. Graphic Organizer Characteristics of a Depression High _______ Low production of goods and ________ Can last for several _______ ________ to other countries High number of unused manufacturing _______ Very _______

14. Depression The _____ market crash on October 29, 1929, or “Black ______,” marked the beginning of the Great Depression.

15. Graphic Organizer The Great Depression The GDP fell nearly 50 percent Unemployment rose nearly 800 percent The average manufacturing wage was 5 cents an hour Many banks around the country failed The money supply fell by one-third Many towns and other civic bodies printed their own money

16. Recovery ________ starts to increase during a recovery. recovery a rise in business activity after a ________ or depression

17. Recovery Characteristics of a Recovery People start going back to ______ People have money to ______ goods and services Demand for goods and services ______more production New ________ open Businesses become more ________

18. Recovery In 1939, the United States was beginning to recover from the _______ when World War II began. The war increased the rate of _______because of the demand for production.