Understanding Economics Part II - PowerPoint Presentation

1. Understanding EconomicsPart II#53- Describe the phases of the business cycle#54- Explain the concept of gross domestic product#55- Explain productivity and its effects on individual businesses and the economy as a whole

2. Phases of the Business CycleRecurring changes in economic activityHistory shows that sometimes an economy grows (expansion) and sometimes is slows down )contraction)Economies have followed the patternsSometimes called “Economic Cycle”Four patterns: Expansion, Recession, Trough-Depression, Recovery

3. Business CycleRecovery Expansion Recession Trough

4. ExpansionEconomy is flourishingSometimes referred to as “prosperity”Nationwide low unemploymentIncrease in output of goods and servicesHigh consumer spendingGood time for new businesses to start up/expandExpansions continues until it reaches a “Peak”“Peak” ends expansion and begins “recession”

5. RecessionPeriod of economic slow downLasts for at least two quarters (or 6 months)Businesses reduce work forceConsumers have less money to spendProducers make fewer goods and servicesResearch and development is cut back/ business expansion put on holdCan end quickly or last a long timeEnd is signified by “trough”- lowest point in the recession

6. Trough Lowest point in business cycleMarks transition from recession to recovery periodEconomy stops slowing and shows signs that recovery is near

7. Depression Prolonged recessionNearly impossible to find a jobBusinesses shut downSpending is very lowUnemployment very highPoverty results from high unemploymentGreat Depression of 1930’s is example

8. RecoveryPeriod of renewed economic growth Follows recession or depressionGDP begins to increaseBusiness picks upPeople are finding jobsIncreased consumer spendingModerate expansion by businesses

9. Class ActivityWork with a partner to complete this class activity.Create a chart that compares and contrasts the 4 phases of the business cycle.Then, identify the phase that you think the United States currently is experiencing and justify your answer.E-mail to mbelote@lcps.org for 50 point assignment

10. Economic IndicatorsStatistics About Economic Activities – used to measure stability and health or performance of an economyStandard of Living- The level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic areaInflation- Sustained increase in the general price level of goods and services in an economy over a period of timeUnemployment Rate- The percentage of the total labor force that is unemployed but actively seeking employment and willing to work GDP- output of goods and services produced by labor and property within a country over a specified period of time

11. What is GDP?Gross Domestic ProductOutput of goods and services produced by labor and property located within a countryIndicator of economic health of a countryServes as measure of county’s productivityUsed as gauge of country’s standard of living

12. What is Productivity?Output per worker hour- measured over a defined period of time

13. Ways to Increase ProductivityBusiness investment in new equipment or facilitiesAdditional training Financial IncentivesReduce work force and increase responsibilities of other workers who remainHigher productivity improves company profits

14. Terms and Concepts to KnowBusiness CycleExpansionRecessionTroughDepressionRecoveryEconomic IndicatorGDPStandard of LivingProductivityWays to Increase Productivity

15. Class AssignmentStudents will work independently or with a partner to complete this assignmentSelect a company and research how that business has increased productivity over recent years.Prepare a breif PPT presentation to deliver to the class that outlines the following:100 PointsCompany OverviewStrategies Used to Increase Productivity Investment Required by the Company Results and Impact on the CompanySummary/Conclusion