ECONOMICS

Economy Types

There are four types of economy in the United States

Agricultural

Service

Industrial

Information

Measuring Economic Activity

Economic Indicators: Measure things like production rate,economic growth, and how it compares to other countries

Gross Domestic Product

Unemployment Rate

Rate of Inflation

National Debt

Gross Domestic Product (GDP)

The total value of the goods and services in a countryin country

Determined by productivity

Calculated by the sum of the following goods and services:

Consumer goods and servicesBusiness goods and servicesGovernment goods and services

Goods and services sold to other countries (exports)

Gross Domestic Product (GDP)

Effect standard of living which is the amount of goodsand services the average citizen can buy

Gross Domestic Product (GDP)

Unemployment RateMeasures the number of the people who are ableto work but do not have a job during a given period of time

Participation Rate: A measure of the active portion of an economy's labor force. The participation rate refers to the number of people who are either employed or are actively looking for work.

ServiceIndustrial

Information

Unemployment Rate

Rate of InflationGeneral increase in the cost of goods and services.the opposite is deflation.

The more people are employed

The more they spend

Demand goes up

Producers raise prices

To pay higher prices

higher wages

demanded

Wages go up

Producers raise prices

again to offset labor

cost

Can spiral out of control and leads to Hyperinflation

Rate of Inflation

Deflation is a general decrease of goods and services

Countries overproduce

Prices are lowered

Production is reduced

Jobs are lostWages

stagnate or are reduced

People have less money

Demand continues to

drop

Rate of Inflation

National Debt

The amount of money a government owes

Government earns money through taxes

Budget deficit is when a country takes less money thanthey owe

Budget surplus is when the country takes in more moneythan it owes

National Debt

Questions

1) What are the reasons for unemployment2) What is the difference between inflation and deflation3) List the four factors of GDP4) What is the current GDP rate