A merican C ivicsHOLT HOLT, RINEHART AND WINSTON1 Chapter 20 Economic Challenges Section 1:The Business Cycle Section 2:Coping with Economic Challenges

American CivicsHOLTHOLT

HOLT, RINEHART AND WINSTON11

Chapter 20Chapter 20

Economic ChallengesEconomic ChallengesSection 1:Section 1: The Business CycleThe Business Cycle

Section 2:Section 2: Coping with Economic ChallengesCoping with Economic Challenges

Section 3:Section 3: Labor and ManagementLabor and Management


Chapter 20


OBJECTIVESOBJECTIVES What are the different parts of the business What are the different parts of the business

cycle?cycle? What are the old theories of the business What are the old theories of the business

cycle, and when did they exist?cycle, and when did they exist? How did the Great Depression change the How did the Great Depression change the

government’s role in the economy?government’s role in the economy?

Section 1:Section 1: The Business CycleThe Business Cycle


Chapter 20


Different parts of the business cycle:Different parts of the business cycle: ExpansionExpansion Peak prosperityPeak prosperity Contraction or recessionContraction or recession Trough or depressionTrough or depression ExpansionExpansion



Chapter 20


Old theories of the business cycle Old theories of the business cycle prior to the Great Depression:prior to the Great Depression: Business cycle should be left alone: problems Business cycle should be left alone: problems

cure themselves.cure themselves. Recessions could not last long: workers would Recessions could not last long: workers would

accept lower wages, thus lowering costs of accept lower wages, thus lowering costs of production.production.

Expanding businesses would help other Expanding businesses would help other businesses expand.businesses expand.



Chapter 20


The Great Depression and the The Great Depression and the government’s role: government’s role: New DealNew Deal——designed to provide jobs and designed to provide jobs and

create financial stability.create financial stability. Civilian Conservation CorpsCivilian Conservation Corps——young people young people

were to restore natural resourceswere to restore natural resources FDIC and SEC created to insure funds and FDIC and SEC created to insure funds and

inhibit fraudinhibit fraud



Chapter 20


The Great Depression and the The Great Depression and the government’s role: government’s role: (continued)(continued)

Social Security System set up to provide Social Security System set up to provide funds for retireesfunds for retirees

Unemployment compensation establishedUnemployment compensation established


Government intervention in the economy remains Government intervention in the economy remains a matter of dispute.a matter of dispute.


Chapter 20


OBJECTIVESOBJECTIVES What economic problems exist, and what What economic problems exist, and what

causes them?causes them? How does the government address economic How does the government address economic

problems?problems? How can citizens work to improve the How can citizens work to improve the

economy?economy?



Chapter 20


Economic problems and their Economic problems and their causes:causes: Inflation—prices increase faster than wages; Inflation—prices increase faster than wages; Unemployment—unemployed workers cannot Unemployment—unemployed workers cannot

pay bills or purchase goodspay bills or purchase goods Recession—production, spending, and consumer Recession—production, spending, and consumer

demand declinedemand decline Money and loans—too much money in Money and loans—too much money in

circulation leads to inflationcirculation leads to inflation



Chapter 20


Economic problems and their Economic problems and their causes: causes: (continued)(continued)

Government and consumer spending—over-Government and consumer spending—over-borrowing reduces savings, increases debt; helps borrowing reduces savings, increases debt; helps raise pricesraise prices

Productivity—foreign productivity hurts Productivity—foreign productivity hurts American businesses; contributes to American businesses; contributes to unemploymentunemployment



Chapter 20


The government addresses economic The government addresses economic problems throughproblems through Changes in Changes in fiscal policyfiscal policy——in a recession, in a recession,

government may lower taxes and increase government may lower taxes and increase government spending.government spending.

Changes in Changes in monetary policymonetary policy——in a recession, the in a recession, the Federal Reserve may increase the money supply Federal Reserve may increase the money supply or lower interest rates.or lower interest rates.

Actions may be reversed in boom periods.Actions may be reversed in boom periods.



Chapter 20


Citizens can aid the economy byCitizens can aid the economy by Increasing savingsIncreasing savings——consumer savings give banks more consumer savings give banks more

money to lend to business.money to lend to business. Reducing credit debtReducing credit debt——reduced debt can lead to more reduced debt can lead to more

savings.savings. Buying AmericanBuying American--made products, which preserves and made products, which preserves and

creates jobs in America.creates jobs in America. Increasing productivityIncreasing productivity——efficient management and efficient management and

workers aid business and may increase wages.workers aid business and may increase wages.



Chapter 20


OBJECTIVESOBJECTIVES What conditions led to the rise of labor unions What conditions led to the rise of labor unions

in the 1800s?in the 1800s? What methods do labor and employers use to What methods do labor and employers use to

negotiate with one another, and what major negotiate with one another, and what major labor laws protect them?labor laws protect them?

What is the state of labor relations today?What is the state of labor relations today?



Chapter 20


The rise of labor unions in the The rise of labor unions in the 1800s:1800s: Large factories used machines and employed Large factories used machines and employed

hundreds of workers.hundreds of workers. Factory managers and owners had little Factory managers and owners had little

contact with workers.contact with workers. Heavy immigration led to too many available Heavy immigration led to too many available

workers.workers.



Chapter 20


The rise of labor unions in the The rise of labor unions in the 1800s: 1800s: (continued)(continued)

Workers were forced to accept long working Workers were forced to accept long working days, low wages, and harsh conditions.days, low wages, and harsh conditions.

Workers organized unions to improve Workers organized unions to improve conditions.conditions.

Collective bargainingCollective bargaining was used to reach was used to reach agreements with employers.agreements with employers.



Chapter 20


Methods of negotiation and major Methods of negotiation and major labor laws:labor laws: Workers’ methods: strikes, picketers, job actionsWorkers’ methods: strikes, picketers, job actions Employers’ methods: Employers’ methods: blacklistsblacklists and and lockdownslockdowns RightRight--toto--workwork laws laws——no one is forced to join a unionno one is forced to join a union 19351935——National Labor Relations Act or Wagner ActNational Labor Relations Act or Wagner Act 19471947——LaborLabor--Management Relations Act or TaftManagement Relations Act or Taft--

Hartley ActHartley Act 19591959——LandrumLandrum--Griffin ActGriffin Act



Chapter 20


The state of labor relations today:The state of labor relations today: Union leaders know companies must make profits Union leaders know companies must make profits

to ensure jobs.to ensure jobs. Companies know workers must have suitable Companies know workers must have suitable

conditions and reasonable wages.conditions and reasonable wages. Modern unions cooperate with companies to run Modern unions cooperate with companies to run

efficient businesses.efficient businesses. Compromises help settle strikes when they occur.Compromises help settle strikes when they occur.



Chapter 20


The state of labor relations today:The state of labor relations today: (continued)(continued)

Mediators make nonbinding recommendations Mediators make nonbinding recommendations to end a strike.to end a strike.

Arbitrators make binding decisions to end a Arbitrators make binding decisions to end a strike.strike.


Documents

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON1 Chapter 20 Economic Challenges Section 1:The Business Cycle Section 2:Coping with Economic Challenges