• Economics is the social science that studies economic activity to gain an understanding of the processes that govern the:
• Production
• Distribution
• consumption of goods
• services in an economy.
• Economics deals primarily with the concept of:
– Scarcity
• What is scarcity?
• Scarcity is the fundamental economic problem of having
– unlimited human wants in a world of limited resources.

Explain the picture in your own words

• What is a market economy?
• A market economy is an economy in which decisions regarding investment, production and distribution are based on
• Supply
• demand
• Main purpose of a market economy would be:
– Encourage political and economic cooperation between member nations

• Market economies are guided by the idea that they are:
– Governed by self interest
– Set prices
• If more people want a product – the price goes up and companies make less
• If less people want a product – the price goes down and companies make more

• What is deficit spending?
– The act in which the federal government spends more than it receives
– Deficit spending is normal in times of economic slowdowns
• Job:
– Pumps money into the economy to:
• Stimulate activity and job growth

• Purchasing power will increase and economic growth will be stimulated
• The overall amount of money that the U.S. owes to its creditors is
Deficit spending

• Some issues that
Governments face with deficit:
– Hard to reduce the size of a deficit
– The larger the budget deficit – the greater the national debt
– Deficit occurs when the government spends more than it receives

• What are the causes of
Economic Depression?
– High unemployment
– overproduction

• Business cycle:
– The fluctuations in economic activity that an economy experiences over a period of time.
– A business cycle is basically defined in terms of periods of expansion or recession.

• Business cycles purpose are for governments to look at:
– Irregular fluctuations in economic activity

• People disagree with the laws of deficit spending
– Do you support /not support the idea of government intervention to help stimulate the economy?

• Work with a partner to track the nations deficit and debt over a period of 10 years
• Write a brief explanation on your findings
• Draw a detailed graph or chart of the information you found