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Unit Five: Learning Objectives:
North Clackamas School District
Social Studies Priority Standards:
Econ 50. Explain how economic
indicators (GDP, CPI, Inflation and
Unemployment) describe the condition of
the economy.
Lesson Four: Daily Learning Target
I Can define and explain in writing the
following key Economic concepts:
GDP
CPI
Inflation Rate
Unemployment Rate
Misery Index
The Effects of the Great Depression
on Economists:
• The Great Depression taught
economists that they needed some way
of tracking the nation’s economy.
• By tracking the nation’s economy,
economists could determine if the
economy was in danger of a recession
or a depression and could try to apply
economic policies to prevent such
hardships from occurring.
The Gross Domestic Product (GDP) is a tool
for tracking Economic progress.
Gross Domestic Product
(GDP)
• The Gross Domestic Product is the dollar
value of all final goods and services
produced within a country’s borders in a
given year.
• In order for a good to be included in a
nation’s GDP, it must be made in that
country.
• It doesn’t matter if the factory is owned by a
foreign company as long as the factory is
located in the country where GDP will be
calculated.
By tracking GDP, economists can tell whether
an economy is growing (expanding) or
shrinking (contracting).
[adverse supply shock]
Demand-Pull
Theory [most
common
• The demand-pull
theory: inflation
occurs when
demand for
goods and
services
exceeds existing
supplies.
Core
16%
Food and
beverages
12%
Transportation
Education and
communication
43%
Housing
6%
6%
6% 4% 4%
Medical care
Recreation
Other goods
Apparel and services
1.
2.
3.
4.
Substitutes not counted
Quality not considered (airbags)
No discount stores (“outlet bias”)
New items not counted
a. 1st VCR, the Phillips 1500, the world’s
1st VCR for home use sold for $1,295
but $50 today. They fell in price 70%
before entering the CPI.
1969 Sharp QT-8D Calculator for $475 [4 functions]
[First battery-powered electronic calculator]
b. First solar powered calculators appeared in 1972 for
$120 but didn’t make the CPI until 1978.
c. In 2000, a 20-inch LCD TV cost $5,000, today under $200.
d. Cell phones[The “Brick”]were introduced in 1984 at $3,995.
e. The camcorder cost $1,500 in 1987, now under $120.
f. 50 inch Flat Screen TV in 1999 cost $12,000, now $650.
1962 Prices v. 2014 Prices
[National Debt - $286 billion]
• Tuition at Harvard - $900
• Starting salary - $6,000
[college graduate]
• FICA of 3.125 of $4,800
[$150 maximum]
• Top marginal tax rate of 91%
of incomes over $200,000.
• New house for $10-15,000
[2.5 times the income of a
new college graduate]
• Coke - .5 cents
• Movies - .50
• Gas, a gallon - $.29
• 1962 Chevy Impala- $1,500
[National Debt - $$16.5 trillion]
• Tuition at Harvard - $36,992
• Starting salary - $44,000
[college graduate]
• FICA of 7.65 of $113,700
[$8,700 maximum]
• Top marginal tax rate of 39.6%
of incomes over $400,000+
• New median house price is
$242,000 [5.5 times the income of
today’s college grads]
• Coke - $1
• Movies - $11
• Gas, a gallon - $3.10
• 2014 Chevy Impala- $28,650
2014 Corvette Grand $94,000
62 Corvette $2,995
Http://objflicks.com/TakeMeBacktotheSixties.htm
We want the “brick.”
Only $3,995, we want 2.”
The 3 pound “Brick”
That will be
$12.00
Please!!
Tickets
$12.00
Box Office Receipts
Movie
Receipts(mil.)
1. Avatar
$761
2. Titanic
659
3. Avengers
623
4. Dark Knight
534
5. Star Wars [Pha Men]
475
6. Star Wars [1977]
461
7. Dark Knight Rises
448
8. Shrek 2
437
9. ET (1982)
435
10.Pirates of Caribbean 423
11. The Lion King
423
12. Hunger Games[C.Fire] 420
13. Toy Story 3
415
14. Iron Man 3
410
15. Hunger games
408
16. Spider-Man
404
17. Transformers
402
18. Jurassic Park
402
19. Frozen
400
20. Harry Potter[Death] 381
Inflation-Adjusted Receipts
Movie
Year
Receipts(mil.)
1. Gone With the Wind [25¢] 1939
$1,650
2. Star Wars
1977
1,426
3. Sound of Music
1965
1,145
4. ET
1982
1,132
5. Titanic
1997
1,096
6. Ten Com.
1956
1,053
7. Jaws
1975
1,029
8. Dr. Zhivago
1965
986
9. The Exorcist
1973
880
9. The Jungle Book
1967
870
10. Snow White
1937
867
11. 101 Dalmatians
1961
795
12. Empire Strikes Back 1980
781
13. Ben-Hur
1959
780
14. Avatar
2009
774
15. Return of the Jedi
1983
748
16. Jurassic Park
1993
731
17. Star Wars [Pha.Men] 1999
718
18. The Lion King
1994
710
19. The Sting
1973
709
What about “Gone With The Wind” in 1939?
#144 [$199 million]
In times of Inflation…money buys less!
1950-59 average = 4.39%
1960-69 average = 4.65%
1970-79 average = 6.10%
1980-89 average = 7.16%
“No job yet”
Slide Rule makers
2013 Overall Unemployment Rate = 7.7%
16%
14%
Unemployment Rate - 1998
12%
10%
8%
13.8
Blacks
Of the 12.0 M who
remain unemployed,
43% have been so for
six months or longer.
9.6%
Hispanics
7%
6%
5%
4%
3%
2%
1%
0
6.8%
Whites
2010 Overall Unemployment Rate = 9.1%
[Unemployment Rate & Median Earnings by Education]
16%
14%
Unemployment Rate - 1998
12%
10%
8%
7%
6%
5%
4%
4.6%
3%
2%
1%
0
$54 K
College
Unemployment Rate
Arthur
Okun
Since 1960, the incumbent party has always lost the election when the
growth rate of real income per capita has been less than 3% and the
misery index has increased during the year preceding the election.
9.5%
6.21& 1.5%]
Now 7.6
A. Frictional
B. Structural
C. Cyclical
.
1.
B
2.
C
3.
A
4.
B
5.
C
6.
A
7.
B
8.
A
9.
A
10.
A
The End