We will be using Cornell Note Taking
Format Today!
Economic Growth:
Full Speed Ahead!
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 Three: Daily Learning Target
I Can define and explain in writing the
following key Economic concepts:
The Federal Reserve Bank (Review)
The Business Cycle
Recession
Depression
Expansion
How the Fed makes monetary policy
The Fed
• The Federal Reserve Bank is commonly
referred to as the “Fed.”
• The Federal Reserve Bank can make loans to
banks, raise or lower interest rates, and
require banks to hold adequate reserves.
• The Fed helps banks across America.
No Dough Bank
Destroy/Issue paper notes
The Fed clears 40%;
Banks clear rest electronically.
The Fed controls the banks’ ability to create new money to
ensure the economy doesn’t get too much money, nor too little.
Fed just right
Underfed
Overfed
1983
1980
+30%
$75.00
Money
And – so it is
with money.
Not too much,
$97.50 not too little.
Prices
Level of business activity
75% of Africans get by on less than $2 a day.
Poverty
Low Per
Capita Income
No New
Development
No Money
For Saving
No Money For
Real Capital
Real
Capital
Real
Capital
Real
Capital
• Size of employed labor force
• Quantity of real capital
• Discovery of new raw materials
• Average hours of work
• Technological advance
• Education and training
• Use resources in the least costly
way [Productive efficiency]
• Allocate resources among
production techniques that
produce goods/services that
maximize society’s well-being.
Increase in
inputs [such
as land, labor
and capital]
[33%]
x
Increase
productivity
of these
inputs
[66%]
=
Real
GDP
12 inch image
$695
10 inch image
would cost
$4,526 in 2013
12 inch image
would cost
$6,485 in 2013
20 inch image
$2,495
20 inch image
would cost
$23,282 in 2013
A business cycle is a period of economic
expansion followed by a period of contraction.
Recessions and Depressions
• Each phase of the business cycle is
determined by monitoring Gross
Domestic Product.
• A contraction that lasts for at least six
months is called a recession.
• A particularly severe and long
contraction is called a depression.
June, 2009
18
Level of business activity
Four Phases of the Business Cycle
[Real GDP per year]
One Cycle
[Have averaged 5-6 years]
Time
Think of it as a
rollercoaster!
Business Cycles
Real GDP
6000
5200
4600
‘80
82
‘85
‘90
“You look good. You
look verrrry good.”
You decide to
get married
Gets engaged
But with education
You become a a job is gained as
happy family well as a new house
1st
date
Happily
ever after
Baby-5 months later
Jealousy sets in
She goes off
to college.
He uses the meeting
line on unsuspecting
freshmen girls
One loses a job
[“The leading indicators have predicted
12 of the last 16 recessions”]
“Barometer
Of The Future”
“Like taking the
blood pressure
of the economy”
[3-6 months]
“Where we are heading”
Little food,
little water
We are afraid we might lose our job
& need some of the fish food money.
The best way to help yourself
in a time of recession………
We all know
the real path
to success &
happiness in
life is to?
Marry a
Kardashian!
The End