How is the patient doing?

1. How is the patient doing?

2. Diagnosing the patient • When you went to the doctor’s office as a child, what were the regular indicators, tests, and measurements that a physician used to see if you were healthy? • Make a list on the left hand column of your organizer. • Now share your list with a neighbor

3. Medical indicators • Measured height • Measured weight • Took temperature • Checked blood pressure • Listened to breathing • Looked in ears, eyes, and throat • Tested reflexes

4. Making a diagnosis • Imagine you were sick with a temperature of 102 degrees. • When you visited the doctor’s office and they took your temperature, would it be important for the doctor to know if your temperature was dropping from 104, or had just risen from 98.6? • Why would this be important? What might the direction indicate?

5. Diagnosing the Economy • What indicators do you think macro economists might use to decide if an economy is healthy or sick?

6. Economic Indicators- The Big Three • GDP = Gross Domestic Product is the value of all goods and services produced in the US • Unemployment rate = the percent of Americans out of work, who are looking for jobs • Inflation/deflation = the rise or fall in the general level of prices

7. Economic indicators • Trade balance = the amount of exports and imports • Business inventory = stockpiles of unsold goods • Consumer spending = the amount of spending consumers do as a group • Savings= the percent of income consumers save rather than spend • The stock market = the rise and fall in stock prices

8. Making a diagnosis • The direction of each of these indicators is also important to an economist diagnosing whether the economy is healthy, sick, getting better or worse. • Read the Time article about CBO estimates. • In the third column of your organizer add information you found for each economic indicator in the second column.

9. How is the economy doing? • Discuss your diagnosis of the US economy with a partner. • Is the economy getting better, getting worse, or staying about the same? • What do you think are the most important indicators cited in the article, that you base your diagnosis on? • On the back of your sheet, write a short diagnosis of the economy using the facts you have gathered.