Chapter 2
Economic Activity
2-1 Measuring Economic Activity
2-2 Economic Conditions Change
2-3 Other Measures of Business
Activity
Introduction to Business
© Thomson South-Western
LESSON 2-1
Measuring Economic Activity
Goals
 Define gross domestic product.
 Describe economic measures of labor.
 Identify economic indicators for
consumer spending.
Chapter 2
Slide 2
Introduction to Business
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Key Terms
 Gross Domestic Product (GDP)
 GDP per capita
 unemployment rate
 productivity
 personal income
 retail sales
Chapter 2
Slide 3
Introduction to Business
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GROSS DOMESTIC
PRODUCT (GDP)
 Components of GDP
 Comparing GDP
Chapter 2
Slide 4
Introduction to Business
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Comparison of GDP in
Selected Countries
Chapter 2
Slide 5
Introduction to Business
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>> C H E C K P O I N T
What types of economic activities are not
included in GDP?
Chapter 2
Slide 6
Introduction to Business
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LABOR ACTIVITIES
 Employment
 Productivity
Chapter 2
Slide 7
Introduction to Business
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>> C H E C K P O I N T
What are ways to increase productivity?
Chapter 2
Slide 8
Introduction to Business
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CONSUMER SPENDING
 Personal income
 Retail sales
Chapter 2
Slide 9
Introduction to Business
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>> C H E C K P O I N T
What are the main sources of personal
income?
Chapter 2
Slide 10
Introduction to Business
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LESSON 2-2
Economic Conditions Change
Goals
 Describe the four phases of the
business cycle.
 Explain causes of inflation and
deflation.
 Identify the importance of interest rates.
Chapter 2
Slide 11
Introduction to Business
© Thomson South-Western
Key Terms
 business cycle
 prosperity
 recession
 depression
Chapter 2
Slide 12
 recovery
 inflation
 price index
 deflation
Introduction to Business
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THE BUSINESS CYCLE
 Prosperity
 Recession
 Depression
 Recovery
Chapter 2
Slide 13
Introduction to Business
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>> C H E C K P O I N T
What are the four phases of the business
cycle?
Chapter 2
Slide 14
Introduction to Business
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CONSUMER PRICES
 Inflation
 Causes of inflation
 Measuring inflation
 Deflation
Chapter 2
Slide 15
Introduction to Business
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>> C H E C K P O I N T
What are the main causes of inflation?
Chapter 2
Slide 16
Introduction to Business
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INTEREST RATES
 Types of interest rates
 Changing interest rates
Chapter 2
Slide 17
Introduction to Business
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>> C H E C K P O I N T
How do interest rates affect business
activities in our economy?
Chapter 2
Slide 18
Introduction to Business
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LESSON 2-3
Other Measures
of Business Activity
Goals
 Discuss investment activities that
promote economic growth.
 Explain borrowing activities by
government, business, and consumers.
 Describe future concerns of economic
growth.
Chapter 2
Slide 19
Introduction to Business
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Key Terms
 capital project
 stock
 bond
 budget surplus
 budget deficit
 national debt
Chapter 2
Slide 20
Introduction to Business
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INVESTMENT ACTIVITIES
 Personal savings
 The stock market
 The bond market
Chapter 2
Slide 21
Introduction to Business
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>> C H E C K P O I N T
Name some examples of capital projects.
Chapter 2
Slide 22
Introduction to Business
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BORROWING
 Government debt
 Business debt
 Consumer debt
Chapter 2
Slide 23
Introduction to Business
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>> C H E C K P O I N T
What is the cause of a budget deficit?
Chapter 2
Slide 24
Introduction to Business
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FUTURE ECONOMIC
CHALLENGES
 Limited access to health care
 Need for proper housing for many
people
 Traffic and crime
 Unemployment
Chapter 2
Slide 25
Introduction to Business
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>> C H E C K P O I N T
What are future economic concerns for a
country’s economy?
Chapter 2
Slide 26
Introduction to Business
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