8th Grade Economics
On you handout, write down 5
words / thoughts that come to mind when
you hear the term “economics”.
What is Economics?
• The use of limited
resources such as money,
raw materials, labor, etc
by nations and states
Georgia’s Economy
– How Georgia produces
– How much debt Georgia has
– How many Georgia citizens are employed
Economic Growth
• Always encouraged because…
The better a state’s economy, the
happier and secure
its citizens tend to be!
What do you know about the current
state of our economy in Georgia?
The U.S.?
What is free trade?
• Importing and exporting
products between nations
or regions
• Imports
– Products coming into
Georgia
• Exports
– Products leaving Georgia
Allows Georgia to earn money
by selling to the rest of the
world, while also purchasing
products from other places that
Georgians need or want.
Why was Georgia founded?
• England founded
Georgia to produce
goods for trade
– Savannah Port
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Cotton
Rice
Indigo
Lumber
Tobacco
International trade was essential to
Georgia’s survival during the 1800’s.
Today…
Georgia relies heavily on TRADE
• Agricultural products and industries are a major
portion of Georgia’s exports
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Peanuts
Tobacco
Cotton
Soybeans
Corn
Poultry
Paper and Forest Products
Manufactured goods
Machinery
Goods and Services in GA
• During the 30’s and 40’s
peanuts and pecans
became very important to
the state of Georgia.
• Nearly half the U.S.
peanut crop comes from
Georgia.
Georgia’s Economic Growth and
Development
• What is profit?
• How is profit an incentive for
entrepreneurs?
• How do entrepreneurs take
risks to develop new goods
and services in order to start
a new business?
What is profit?
• Amount of money a
person or business
earns and has left
over after all costs
of production are
paid
What is an entrepreneur?
• Someone who starts a
business or a company,
taking great financial
risks in the process
• They take these risks in
hopes of earning a
profit.
How is profit an incentive for
entrepreneurs?
How do entrepreneurs take risks to
develop new goods and services in
order to start a new business?
Entrepreneurs take financial
risks! They invest large
amounts of money into a new
business in hopes that they
will earn a profit! If they don’t
earn a profit, their financial
invest is lost!
• 1886, John Pemberton invented
a new drink to cure headaches
• 1892, Asa Candler bought the
rights to the drink for $2300 and
began marketing “Coca-Cola” as
a regular drink instead of as a
medicine
• One of the first entrepreneurs to
understand the importance of
national advertising resulting in
Coke becoming a household
name.
• In 1919, he sold the company to
Ernest Woodruff for $25 million
making a profit of $24,997,700.
• Four years later, Robert
Woodruff took over and built
Coke into what is today!
The Home Depot
• 1978 - Founded by Bernie
Marcus and Arthur Blank in
Atlanta
• By 2004, profits exceeded $5
billion
• Locations in all 50 states and
several foreign nations
• Arthur Blank is also the owner
of the Atlanta Falcons as a result
of his success with Home Depot
• 1927 - Created by Owen Cheatem
in Augusta, GA
• Originally a lumber company
• Currently largest wholesaler of
building products in North America
• Second largest producer of paper
products
• 1924 – began as a crop-dusting
business in Macon, GA
• Became a major airline under the
leadership of C.E. Woolman
• 1941, moved headquarters to
Atlanta
• 1st transatlantic flight in 1978
• Hard times due to economy, 9-11,
etc
• Had to file for bankruptcy in 2003
and re-emerged from bankruptcy
in 2007
• 1967 - Founded by Truett Cathy
in Atlanta
• Original restaurant was called the
Dwarf Grill
• Operates more than 1200
restaurants in 38 states
• Over $1.7 billion in profits
• One of the nation’s most
successful restaurant chains
• American Family Life Insurance
(changed to Assurance) Company
• 1955 – founded in Columbus, GA
by three brothers: John, Paul, and
Bill Amos
• Pioneered Cancer insurance in
1958
• National’s leader in supplemental
health insurance
• Rated as one of the best
companies in the nation to work for
• Still based in Columbus
• One of the most popular company
mascots: the AFLAC DUCK
Who am I?
• This product was initially created to be a
medicine.
• In 1892, Asa Candler purchased this
company for $2300. In turn, he sold the
company for $25,000,000 in 1919!
Guess Who
• 1978 - Founded by Bernie Marcus and
Arthur Blank in Atlanta
• By 2004, profits exceeded $5 billion
• Locations in all 50 states and several
foreign nations
Who am I?
• Georgia company
• Originally a lumber company
• Now second largest producer of paper
products
Who am I?
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Atlanta based company
Began as a crop dusting business
1st transatlantic flight in 1978
Filed for bankruptcy in 2003 due to
economic issues
Who am I?
• Atlanta based
• Founded by Truett Cathy
• Original restaurant was called the Dwarf
Grill
• Over $1.7 billion in profit
Who am I?
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Georgia based company
Supplemental insurance
Pioneered cancer insurance
Most famous company mascot
Hmmm…
What do you think state
and local governments
spend their money
on???
How do you think state
and local governments
make money???
State and Local Spending
• Spend “millions of dollars” on employee salaries
and services for citizens
– Government employees (state or municipal money)
• Teachers
• Elected officials
• Law enforcement
– Services for citizens
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Police and emergency services
Education
Medical services
Trash collection,
Road construction
How are choices made as to how the
government will spend its money?
• Many services to fund, but revenues are limited
(limited supply of money)
• A budget is used to organize the revenues and
spending
– A budget includes:
• Projected income
• Projected spending
• Services that will receive money
– Debt affects a budget
• The greater the state’s debt, the less money for
services and salaries.
Factors that affect government
spending…
• Debt
– The greater the debt, spending decreases
• Political Parties
– Republicans  more conservative with spending
– Democrats  more liberal with spending
• Taxes
– The higher the taxes, the more money the government has for spending
• Population
– The more people, the greater the demand for services
– More tax payers
• Constituencies (a group of citizens an elected official represents and
answers to)
– How a constituency feels “greatly affects how much a leader supports or
opposes spending in certain areas”
• Opportunity Cost
– Giving up an option in order to obtain the other option
Opportunity Cost Examples…
• If the government chooses to fund a health
care program, it must give up spending
money on another program such as
education or emergency services.
• What are a few opportunity cost
choices you have had to make in the
last two weeks?
Government Revenue
• Revenue is the money the government
takes in to fund its spending
• Two revenue categories
– Fees, Fines, and Grants
– Taxes
Fees
• Money that you pay directly for a service,
license, or to register for something, etc
• EX:
– MARTA fare
– Toll Road fare
– Business license fee
– Driver’s license fee
Fines
• Money paid as a punishment
– Traffic violations
– Littering
– Failure to abide by local ordinances
– Failure to obey state regulations
Federal Grants
• Money the federal
government gives to
the state or local
government in order to
help address a specific
issue
– Road improvements
– School improvements
– Environment protection
Taxes
• Money that citizens and businesses must
pay the government
• Most common way the state and local
governments raise money
• Property Tax
• Income Tax
Sales Tax
• Tax on products you buy
– Normally a percentage of
the total cost
• Examples
– CD’s
– Video Games
– Clothing
– Shoes
Property Tax
• Taxes on property you own
• Based on the value of your property
• Examples of property that will be taxed:
– Cars
– Homes
– Other structures
Personal Income Tax
• Paid to the State of
Georgia and the Federal
government
• Based on how much
money a person makes
• Comes out of a person’s
paycheck
Money Management…
Without a money management plan, you
may possibly fall into debt.
Debt is the amount of money that you owe.
This occurs when you spend more money
than you actually have.
What is credit?
• Sometimes, debt isn’t a negative thing.
• For example, when you buy a house or
car…
– You may borrow money from the bank or
other lender and pay back the amount owed
plus interest.
– Interest is normally based on a percentage of
the amount owed.
What happens when you are
unable to pay back your loans???
• When a home loan becomes too much
for an individual or couple to pay back,
the lender or bank can take back the
property. This is known as
foreclosure.
– The borrowers lose their house and any
amount of money they have paid on their
loan.
• If you become unable to pay your car
payment, the lender can re-possess
your property.
• All above can lead to a very low credit
score.
How can you affect
the economy through
your on personal
money management?
“When people don’t pay their loans, it hurts
the economy because lenders make less
money and, therefore, have less money to
lend. As a result, not as many people can
get the loans they need to buy houses,
etc.”
As a result….
There is a HUGE snowball effect….
Fewer people purchase homes…
Income for realtors, contractors, car
salesmen, etc decreases…
Sales people make less
commission…
Waiters get fewer tips…
And people begin losing JOBS!
The amount of money that you owe
to lenders is called what?
A – credit
B – interest
C – bankruptcy
D – debt
Which of the following does a
person need to know to plan an
effective budget?
A – Statewide interest rates
B – His or her credit score
C - Personal income
D – Adjustable rate mortgages
People save money for all of the
following reasons except…
A – Retirement
B – A specific item they want to buy
C – Education (College)
D – To win the lottery
You should make wise money
decisions because…
A – You want to buy a video game.
B – You want to go bankrupt.
C – You want to lose your job.
D – You want to be a good citizen
and positively contribute to the
economy and your community.