Agenda

1. Agenda Company Permission Slips Due next class!!!!!!!!!!! Test #3 Ten minute review Remain quiet Test Ends @ 11.00 Intro to Module #4 … GDP and Economic Growth Homework Naked Economics, Chapter 9…”Keeping Score: Is my Economy Bigger than Your Economy?” Review Powerpoint for next class (online) Read “Current Reading Assignment” (online)

2. Test #3 • Ten minute review • Remain quiet • Test Ends @ 8.40

3. THREE MINUTE BREAK http://www.online-stopwatch.com/bomb-countdown/

4. Intro to Module #4 … GDP and Growth GDP….What is it? • Gross Domestic Product • Most Commonly cited economic statistic • Defined as … • Dollar Value • Final goods and services • Produced in the country (state, City, etc.) • In a year

5. Intro to Module #4 … GDP and Growth Most Commonly cited economic statistic • It’s usually what they are talking about when the headlines say, “the economy….”

6. Intro to Module #4 … GDP and Growth GDP….What is it? • The four part definition… • Dollar Value • Final goods and services • Produced in the country (state, City, etc.) • In a year What is in Gross Domestic Product?

7. Final Goods vs. Intermediate Goods Intermediate goods and services - Goods and services used to produce other goods. Final goods and services – Goods and services sold to the consumer GDP uses on final goods and services Why? Avoids doublecounting

8. Intro to Module #4 … GDP and Growth What is in Gross Domestic Product? • Are these examples of U.S. G.D.P.? • A Toyota built in Tennessee and purchased by you? • Maple syrup produced in Canada and purchased by you? • A Toyota built in Tennessee and purchased by a taxi company? • The Nike shoes designed in Oregon, built in Vietnam and sold in Europe? • Maple syrup produced in Canada and purchased by IHOP in the U.S.?

9. Intro to Module #4 … GDP and Growth Why is Gross Domestic Product so important? Remember our friendly entrepreneur? Which box best represents GDP?

10. Intro to Module #4 … GDP and Growth Why is Gross Domestic Product so important? If GDP then employment (unemployment ) If GDP then employment (unemployment ) This is the key connection!!!

11. Intro to Module #4 … GDP and Growth GDP changes in cycles. That’s called the “business cycle”.

12. Intro to Module #4 … GDP and Growth The Business Cycle Percent Change GDP Time

13. Intro to Module #4 … GDP and Growth The Phases of the Business Cycle Percent Change GDP peak contraction 5% expansion expansion 1% trough trough 0% Time -5% trough Recession GDP is shrinking (very bad)

14. Intro to Module #4 … GDP and Growth

15. Intro to Module #4 … GDP and Growth • US GDP is very large • 2012 US GDP was $15.6 trillion • (that’s $15,600,000,000,000 of good and services) • That’s #1 in the world. • But GDP moves in small increments… • Greater than 3% = good job creating growth • 0% to 3% = sluggish, no jobs created • < 0% = bad (recession)

16. Intro to Module #4 … GDP and Growth GLOBAL COMPARISONS http://en.wikipedia.org/wiki/List_of_countries_by_future_GDP_(nominal)_estimates Changes since 2000?

17. Homework • Naked Economics, Chapter 9…”Keeping Score: Is my Economy Bigger than Your Economy?” • Review Powerpoint for next class (online) • Read “Current Reading Assignment” (online) • Permission Slips DUE!

18. HEADS UP… I won’t be here March 14 through March 20 Being sent to review Bishop Diego’s accredidation.