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Circular Flow and the Business Cycle

Circular Flow and the Business Cycle. Produced by Polly Callahan. Two Economic Units. Motivation. Why is there Scarcity?. Resources (Factors of Production) are LIMITED. Human Wants are UNLIMITED. Opportunity Cost. Trade Off; The highest ranking alternative NOT chosen; the #2 choice.

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Circular Flow and the Business Cycle

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  1. Circular Flow and the Business Cycle Produced by Polly Callahan

  2. Two Economic Units

  3. Motivation

  4. Why is there Scarcity? • Resources (Factors of Production) are LIMITED • Human Wants are UNLIMITED

  5. Opportunity Cost Trade Off; The highest ranking alternative NOT chosen; the #2 choice

  6. Economic Systems Manage Scarcityand answer the basic economic questions

  7. Types of Economic Systems

  8. Self Interest Drives the System in a Market Economy

  9. Circular Flow Charts model how the two economic units interact

  10. Goods and Services Firms, Business, Producers Households, Individuals, Consumers Land, Labor, Capital

  11. Payment for goods & services Firms, Business, Producers Households, Individuals, Consumers Rent, Wages, Interest

  12. Payment for goods & services $ Firms, Business, Producers Households, Individuals, Consumers Rent, Wages, Interest

  13. Payment for goods & services Firms, Business, Producers Households, Individuals, Consumers $ Rent, Wages, Interest

  14. Resource Market Demand Supply Firms, Business, Producers Households, Individuals, Consumers Demand Goods & Services Market Supply

  15. Resource Market Demand Supply $ Cost Income $ Firms, Business, Producers Households, Individuals, Consumers $ Expenditure Revenue Demand $ Goods & Services Market Supply

  16. Business Cycle The business cycle is like a Roller Coaster, except that the ride down is the worst part. Photo of new Kings Dominion Ride: The Intimidator

  17. Gross Domestic Product The total value of all goods and services produced in a country over a period of time (minus the trade deficit or plus the trade surplus of that country.) Graphing GDP numbers show where a country is in the business cycle.

  18. Business Cycle

  19. GDP

  20. Expansion Bull market Economy is growing Recovery GDP (Gross Domestic Product) is increasing Peak - its highest point

  21. Contraction Bear Market Economy is shrinking Recession GDP is decreasing Trough- its lowest point

  22. Interactive Business Cycle • Business cycles can also be drawn in a circle or loop. • Read each slide before you click next to move to other slides.

  23. Click hereto view the interactive chart.

  24. Click here to view a video on the business cycle

  25. Click on the picture to view a rap that compares two economic theories. You can read the lyrics too.

  26. MSDE Objectives -The student will evaluate how governments affect the answers to the basic economic questions of what to produce, how to produce, and for whom to produce (4.1.1). -The student will evaluate the effectiveness of current monetary and fiscal policy on promoting full employment, price stability, and economic performance (4.1.4) AASL Learning Standards -Read, view, and listen for information presented in any format (e.g., textual, visual, media, digital) in order to make inferences and gather meaning. Read, view, and listen for information presented in any format (e.g., textual, visual, media, digital) in order to make inferences and gather meaning. (1.1.6) -Connect understanding to the real world. (2.3.1)

  27. Works Cited Cox, Amanda. "Turning a Corner? - Interactive Graphic - NYTimes.com." 2 July 2009. The New York Times - Breaking News, World News & Multimedia. 23 Apr. 2010. Web. 23 Apr. 2010. Fear the Boom and Bust. Dir. John Papola. Fear the Boom and Bust. Econ Stories. Web. 23 Apr. 2010. <http://hayekcenter.org/?p=1954>. Haskell, Douglas. "EconEdLink | Focus on Economic Data: U.S. Real GDP Growth, March 26, 2010." EconEdLink | a Premier Source of Classroom-tested, Internet-based Economic Education Lesson Plans for K-12 Teachers and Their Students. Council for Economics Education, 31 Mar. 2010. Web. 17 Apr. 2010. <http://www.econedlink.org/lessons/index.php?lesson=904&page=teacher>. Hockensmith, Richard. longhorn1.jpg. March 2005. Pics4Learning. 18 Apr 2010 http://pics.tech4learning.com <http://www.nytimes.com/interactive/2009/07/02/business/economy/20090705-cycles-graphic.html?emc=eta3>.

  28. Kolk, Melinda. andean01.jpg. May 2004. Pics4Learning. 18 Apr 2010 2010 http://pics.tech4learning.com Lucchetti, Aaron, and Grocer, Stephen. "Wall Street On Track To Award Record Pay." Wall Street Journal [New York] 14 Oct. 2009, sec. A: 1. Online http://online.wsj.com/article/ SB125547830510183749.html "Photo Gallery :: The Latest." Intimidator 305 :: Kings Dominion :: Doswell, Virginia. Kings Dominion. Web. 18 Apr. 2010. <http://www.intimidator305.com/public/latest/gallery/index.cfm?gallery_directory=renderings>. photo &copy; Adrian van Leen for <A HREF=http://20758.openphoto.net>openphoto.net</A> CC:PublicDomain photo &copy; Michael Lane for <A HREF=http://7426.openphoto.net>openphoto.net</A> CC:Attribution-ShareAlike "Preview the Bear_bear2 Sound Effect." Royalty Free Music, Free Sound Effects, Free Royalty Free Music Loops. Web. 19 Apr. 2010. <http://www.partnersinrhyme.com/soundfx/bear_sounds/bear_bear2_wav.shtml>.

  29. "Preview the Human_scream74 Sound Effect." Royalty Free Music, Free Sound Effects, Free Royalty Free Music Loops. Web. 20 Apr. 2010. <http://www.partnersinrhyme.com/soundfx/human_sounds/human_scream74_wav.shtml>. Prouty, Doug. grizzlyrun.jpg. July 2005. Pics4Learning. 18 Apr 2010 http://picstech4learning.com "Sound Effects Animal Sounds - Free File Download." Your Ultimate Categorized .WAV Source. Web. 20 Apr. 2010. <http://www.ilovewavs.com/Effects/Animals/Animals.htm>. YouTube - (Econ) My Humps - My Business Cycle Bumps. Perf. Alex Kwok, Efrem Huang, Jeff Ho, and Norman Truong. YouTube - Broadcast Yourself. Web. 23 Apr. 2010. <http://www.youtube.com/watch?v=ovAXn7-kXRo>.

  30. Creative Commons License Creative Commons A ttribution-Noncommercial-Share Alike 3.0 United States License <a rel="license" href="http://creativecommons.org/licenses/by-nc-sa/3.0/us/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-sa/3.0/us/88x31.png" /></a><br /><span xmlns:dc="http://purl.org/dc/elements/1.1/" href="http://purl.org/dc/dcmitype/InteractiveResource" property="dc:title" rel="dc:type">CircularFlow &amp; Business Cycle</span> by <span xmlns:cc="http://creativecommons.org/ns#" property="cc:attributionName">Polly Callahan</span> is licensed under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-sa/3.0/us/">Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License</a>.

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