Economic HealthAKA The Good, The Bad and The Ugly

1. The Good

1. The Good

• 1. The economy is constantly going through cycles

• These cycles are called crest and troughs• High points are marked by inflation and low

points are recessions and at worst depressions

• 2. A good unemployment rate is between 2-5%• Some people flat out do not want to work

• 3. Expansion- When the economy improves due to lower unemployment and more spending

2. The Bad

2. The Bad

• Recession• 4. A general slowdown in the economy• Increase in unemployment but prices are still

high

• Inflation• A period where the prices of goods goes up

and the value of the dollar goes down.• 5. Can be caused by a higher minimum wage• 6. Ex. Gas use to be 35¢ a gallon and now is

$3.35 a gallon

2. The Bad

• 7. Unemployment- the number of people without a job• Different types• Frictional Unemployment- Temporary and

unavoidable unemployment• Ex. High School/ College Graduates looking for jobs

or people who are in-between jobs• 8. Seasonal Unemployment- People who are

unemployed during certain parts of the year• Ex. Landscapers and Ski-resort workers

2. The Bad• Structural Unemployment- employment that is

the result of labors having skills that are no longer desired• 9. Technological Unemployment- workers being

replaced by machines, computers and the workers who use them

• 10. Cyclical Unemployment- Unemployment caused by an overall downturn in employment (recessions or depressions)• AKA Now!

The Ugly

3. The Ugly• Depression• 11. A very severe and long downturn in the

economy• High bankruptcy and very high unemployment• 12. Prices drop due to almost no demand for

goods• The Great Depression was caused by buying

stock on the margin (with credit) and people losing more money than they had.

4. The Others

• GDP- Gross Domestic Product- The total market value of all final goods and services produced within an economy.

5. The End

• How can we determine the overall health of our economy?

13. _________________________________________________________________________________________• How is our economy interdependent?14. _________________________________________________________________________________________