Engage: 1 “What causes output to rise and fall?” 2. “What causes unemployment to rise and fall?” Subject: Macro-Economics Teacher: Ms Sana Academic Year: 2021-2022 Lesson 13.1: Business Cycles and Economic Instability Lesson Objectives: Identify phases of business cycles. Describe what makes business cycles fluctuations. Subject: Macro-Economics Teacher: Ms Sana Academic Year: 2021-2022 Explore: Business Cycles ? Group work 1. Recovery causes and it’s results in economy, example of country. 2. Peak causes and results in the economy, example of country. 3. Trough causes and effects in the economy, country example. 4. Recession causes and effects in the economy, example of country. Objectives: *Analyze the characteristics of business cycles Causes of Business Cycle? Ø What are the main phases of Business Cycle in UAE? Ø What are the causes of Business cycle? List 3 causes. Objectives: *Analyze the characteristics of business cycles Use the Word Box and label the Phases? Expansion/ Recovery Peak Trough Recession/ Contraction Charecteristics of Business Cycle phases? Objectives: *Analyze the characteristics of business cycles Charecteristics of Business Cycle phases? Objectives: *Analyze the characteristics of business cycles Charecteristics of Business Cycle phases? Objectives: *Analyze the characteristics of business cycles Business Cycles ? Economic Indicators GDP Business Investment Standard of living ( consumer spending) Jobs (Unemployment rate) Objectives: *Analyze the characteristics of business cycles Expansion Peak Trough Contraction Business Cycles ? v Business cycle regular ups and downs of real GDP. v Business fluctuations rise and fall of real GDP over time in an irregular manner- interrupt growth at other times. Objectives: *Analyze the characteristics of business cycles Phases of the Business Cycle Expansion: A speedup in the pace of economic activity ( growth) Peak: The high point of a business cycle. ( strong economy) Contraction ( recession): A decline in real GDP . Depression: A particularly long-lasting and painful recession. Trough: The lower turning point of a business cycle, where a contraction turns into an expansion. Objectives: *Analyze the characteristics of business cycles Phases of the Business Cycle Objectives: *Analyze the characteristics of business cycles Starter What is a great Depression? What is the Trend Line Trendline: What is the Trend Line Trendline: Growth path the economy would follow if it were not interrupted by alternating period of recession and recovery Business Cycles Case study FDR Addresses the Great Depression with the New Deal Hoover, a Republican who had formerly served as U.S. secretary of commerce, believed that government should not directly intervene in the economy, and that it did not have the responsibility to create jobs or provide economic relief for its citizens. In 1932, however, with the country mired in the depths of the Great Depression and some 1315 million people (or more than 20 percent of the U.S. population at the time) unemployed, Democrat Franklin D. Roosevelt won an overwhelming victory in the presidential election. By Inauguration Day (March 4, 1933), every U.S. state had ordered all remaining banks to close at the end of the fourth wave of banking panics, and the U.S. Treasury didn’t have enough cash to pay all government workers. Objectives: *Analyze the characteristics of business cycles Case study Questions 1. For farmers, the Great Depression was probably… a. not a huge deal, because they had been struggling for the past decade. b. catastrophic, because they had been enjoying success over the years. c. crippling, because of the government buyout on wheat and rice. d. energizing, because people could only afford to eat raw plants. Objectives: *Analyze the characteristics of business cycles Case study Questions 2. Which of the following BEST summarizes Hoover’s view of the Great Depression? a. It was NOT the government’s job to create jobs in the business sector. b. The government had not done nearly enough in the past to help out struggling businesses. c. The Great Depression was caused because of the gold standard. d. The Great Depression was caused by labor unions encouraging their employees to strike, which decreased productivity. Objectives: *Analyze the characteristics of business cycles Case study Questions 3. The first thing Roosevelt did after being elected to office was… a. Create the FDIC b. Declare a bank holiday c. Create the SEC d. Deliver a fireside chat. 4. How would a member of the Socialist Party have felt about the creating of the TVA? a. Excited, because the government was taking over one of the private business sectors. b. Disappointed, because the government could now shut off their electricity. c. Overjoyed, because none of them had previously been able to use electricity. d. Skeptical, because now they would be using hydroelectricity, which was very unreliable. Objectives: *Analyze the characteristics of business cycles Case study Questions 5. The Social Security Act made the United States… a. The first industrialized country to offer anything like it. b. The last industrialized country to offer it. c. Get out of debt immediately. d. The poorest country in the world. Objectives: *Analyze the characteristics of business cycles Phases of the Business Cycle Expansion: A speedup in the pace of economic activity ( growth) Peak: The high point of a business cycle. ( strong economy) Contraction ( recession): A decline in real GDP . Depression: A particularly long-lasting and painful recession. Trough: The lower turning point of a business cycle, where a contraction turns into an expansion. Objectives: *Analyze the characteristics of business cycles Business Cycles What are the causes of Business cycles? Objectives: *Analyze the characteristics of business cycles 3 Main Goals Of every Country What are the Three Main Goals of every Country? Objectives: *Analyze the characteristics of business cycles Three main Goals of every Country? Ø Economic Growth. Ø Limiting Inflation. Ø Minimizing the unemployment rate. Objectives: *Analyze the characteristics of business cycles Causes of Business Cycle? Group work Ø What are the main phases of Business Cycle in UAE? Ø What are the causes of Business cycle? List 3 causes. Objectives: *Analyze the characteristics of business cycles Plenary What is the difference between Business cycle and business fluctuations? Business Cycles What are the causes and consequences of instability in the economy? Objectives: *Analyze the characteristics of business cycles Business Cycles What are the causes of Business cycles? Objectives: *Analyze the characteristics of business cycles Causes of Business Cycle? Ø External Shocks can cause business cycles: Increase in oil prices, Wars, Natural disasters. Ø Changes in Investment spending. Ø Speculation and bubbles. Objectives: *Analyze the characteristics of business cycles 3 Main Goals Of every Country What are the Three Main Goals of every Country? Objectives: *Analyze the characteristics of business cycles Three main Goals of every Country? Ø Economic Growth. Ø Limiting Inflation. Ø Minimizing the unemployment rate. Objectives: *Analyze the characteristics of business cycles Causes of Business Cycle? Using your understanding of the lesson answer the questions in your one note: 1. External shocks like high oil prices have what kind of impact on the economy? A. Drives the economy up B. Drives the economy down C. Economy stays the same. 2. Define the following words: Fiscal policy shocks: Speculation and bubbles: Depression scrip: 3. How did the great depression change the role of governement in the economy? Objectives: *Analyze the characteristics of business cycles Plenary What is the difference between Business cycle and business fluctuations?
