Post on 21-Dec-2015
Today’s ObjectiveStudents will be able to identify and describe
how GDP, CPI, Inflation, and Unemployment measure the health of our economy BY
• listening to an audio clip about the 2008 economic collapse,
• completing a graphic organizer, • participating in a simulation (all week) and • calculating the GDPs for various countries.
Listen to the sound clip. How do the occurrences indicate a
recession? Headlines How does this
illustrate a recession?
Dentist Observes A Rise in Cracking Teeth
Urologists See Rise in Vasectomies
Traffic Delays Drop by One-Third
Women Rob Banks and Buy Cashier’s Checks to Pay Their Rent
Porn Sales are Down
Shark Attacks at Their Lowest Point in 5 years
Expansion
Unemployment goes down.
A period of economic growth.
GDP goes up.
CPI goes up (inflation).
• Many people in Baltimore are employed, so they buy new cars.
• General Motors wants to produce more cars, so it gets a loan from Bank of America to hire workers.
• General Motors hires more workers to make more cars.
• These new workers now have jobs, so they spend money on new refrigerators…
ExpansionDuring expansions, money flows well between consumers, businesses, and
banks.
• General Motors goes out of business and all of its workers lose their jobs.
• These unemployed people stop buying coffee and muffins.
• Starbucks tries to get a loan to stay in business.
• Bank of America won’t loan money to Starbucks because it thinks it is going out-of-business and won’t pay them back.
• Starbucks goes out of business and all of its workers lose their jobs.
• These unemployed people stop buying…
RecessionDuring a recession, money does not flow well between consumers, businesses, and
banks.
Unemployment• You must able to work, want to
work, and unable to find a job• Unemployment Rate = Percentage
of people who fit this requirement
Good?Under 5%
Bad?Over 5%
What do you think the current unemployment rate
it?
Bad.9.5%
I’m looking
for work but I can’t find a job!
CPI: Consumer Price Index
It is a basket of goods that we use to measure how prices rise and fall (inflation).
2008 2009
Ketchup $2.19 $2.25
Pencil $.10 $.12
Haircut $12 $13
Consumer Price Index2008 2009
Cheerios $3.79 $3.88Dozen Eggs $2.19 $2.22
Gallon of Milk $3.69 $3.79Gasoline $1.88 $1.74
12-pack of Coke $4.99 $4.99$16.54 $16.62
CPI: .5%A positive CPI means that prices are
going up
The total value of all final goods and services made IN a country during the year.
GDP: Gross Domestic Product
If you bought everything that was for sale in the United States in one year, how much would it cost you?
The answer: $14 trillionThat’s $14,000,000,000,000.00