6. Erasmus +
What is consumption?
I‘ve heard it in school.
Daaad, in the
newspaper I read that
the consumption of the
German population
increased a lot.
7. Erasmus +
Hey babe, how
should we explain
the word
consumption to
the children?
Hmmm,
let‘s take
an
example!
8. Erasmus +
That‘s a good idea! So,
Lisa and Leon, please
listen to me. Take for
example our family. To
have a good life, we
need things every day.
These are both materialThese are both material
and immaterial goods.
9. Consumption means to buy
goods. So consumption
means buying and using ofmeans buying and using of
goods as a consumer.
10. I don‘t understand the
difference between material
and immaterial goods!
11. I will explain it to you. Material goods are the
goods which you can touch, for example a
car and immaterial goods are the goods
which you cannot touch, for example a
licence.licence.
12. Now I will go on! To measure the cosumption of
our country, we have a so called consumer
confidence index. This is a figure, which tells us,
how much the German population buys at the
moment. The CCI is measured by the GfK. With
Wow, I
understand it
really well,
although it ismoment. The CCI is measured by the GfK. With
their figures they determine the CCI.
although it is
very
complicated. But
what is the
situation of
Germany like at
the moment?
13. Yes yes, I‘m not ready yet. The situation
in Germany and in Ostwürttemberg at thein Germany and in Ostwürttemberg at the
moment, is very good and rises
constantly out of the black and into the
blue. The people in Germany buy many
goods, so they do a lot of consumption
because they spend a lot of money.
14. The reasons for the good times are, that the oil
and fuel prices are very low. Moreover, the income
has been very high since this year. For all these
reasons the people buy big things. In general, thereasons the people buy big things. In general, the
last time consumption was so high in Germany
was13 years ago. The last peak period of the CCI
was in 2006. Then the people bought a lot of things
because they looked towards the rising of the value
added tax and used their last chance to buy cheap
products.
15. Now I‘ll come to the last point. There is
one problem with the CCI. The CCI only
considers the private consumption. Itconsiders the private consumption. It
doesn´t consider the industrial
consumption, which means the investion
of companies. So it isn´t a figure about
the whole economy. But the figure can
nearly be right.
16. Ahh, now I
understand
it all really
well and I
gained a
Wow, thank you Mum and
Dad you explained it all
really well. And now let‘s go
shopping ,I want to do
consumption! ☺
gained a
little more
knowledge.
consumption! ☺
18. Mom, everything is
getting more
Okay, that‘s fine.
Let‘s adapt it to
the current
inflation rate.
getting more
expensive. I need
more pocketmoney!
19. Yes,sure! So you get 2€ per
month and you can buy 22
bonbons. The inflation rate is
0,9% and so now you need
2,18€ to buy 22 bonbons.
Okay☺ can
we calculate
it, please?
20. hSo I only get
Yes, because
the inflation
rate is so low.
hSo I only get
18ct more??:O
25. Erasmus +
Mom, please tell me,
what is deflation?
Deflation is a prolonged decline of the price
level of goods and services.level of goods and services.
26. Erasmus +
And when is this
happening?
This happens when aggregate demand is
less than the aggregate supply.less than the aggregate supply.
27. Erasmus +
What does that mean? Demand for goods
drops
Prices
decrease
Look at this!
Demand for
credits
decreases
Demand and
production declines
Interest rate drops
Loss of jobs, lower wages.
Companies go bankrupt
Further decrease of demand because
people wait for additional price reduction
28. Erasmus +
And how do you measure that?
This is measured by the consumer
price index, if it´s negative, you can
see the amount of deflation.
29. Erasmus +
Has anything like this ever happened
in Germany?
Yes, there has. We had a deflation
from 1929-1933 during the Great
Depression. That's why we suffered
from mass unemployment, wagesfrom mass unemployment, wages
were reduced and domestic demand
declined and the crisis worsened.
I´m sure, that you know the "Black
Friday“…this was the day when the
New York stock exchange crashed.
This was also a deflation..
30. Which consequences are there for the
state?
For the state, it is aFor the state, it is a
stagnant to declining
growth.
31. Are there advantages
and disadvantages?
Yes, it has advantages: lower prices for
consumer goods and therefore we can
afford more. Then you can buy stuff from
your own pocket money because it is
cheaper.and disadvantages? cheaper.
But it also has an impact on the labor
market. Firms have fewer sales, competition
is getting tougher, so they cut wages of
workers or even dismissed that, in order to
participate further in the competition. Many
companies also conclude, there are more
unemployed people and VAT may be raised.
32. Thanks Mom and Dad, now we
know everything about deflation ☺
35. Erasmus +
There is a difference between voluntary
unemployment, people who do not want to
work, and unvoluntary unemployment, people
who can not get a job.
36. Erasmus +
There is an unemployment rate. It is calculated
with the registered unemployed people times
100 divided through employees.
2
And how can you find out how
many people are without a job?
1
37. Erasmus +
No, because not everyone who is unemployed
is registered. Also the numbers are not updated
quickly and some people work without paying
taxes, so they are clandestine workers.
2
But is this number always
accurate?
1
38. Erasmus +
Yes, of course. There are many problems. First,
the state earns less money and has to increase
the taxes.
2
Isn‘t it bad for the government
and the citizens that many
people do not work?
1
39. Erasmus +
Economical damage occurs, too. People do not
work, so their workforce is not used. That is
called opportunity costs. The economical
reputation of a country is also damaged.
40. Erasmus +
That is another problem. Unemployed people
are not able to buy very much anymore,
because the only money they get is social help.
That means the buying power decreases.
2
But how do they buy their
sweets then?
1
41. Erasmus +
Well, one main problem of our German job
market is that there is an extremely high long-
time unemployment rate because sometimes
people refuse to work.
2
What are the problems that
cause people to have no jobs?
1
42. Erasmus +
Also there is a lack of highly qualified and
educated workers for the jobs that are needed
and available. This happens because many
people who are looking for jobs don‘t have the
necessary degree or job training. That is called
skilled worker shortage.
43. Erasmus +
There are many solution approaches but it is
hard to defeat unemployment. For example, we
need more work-orientated schools and
trainings.
2
Aren‘t there any solutions for
that problem?
1
44. Erasmus +
In addition, the state should give more
incentives and control whether unemployed
people constantly search for a job. Part-time
jobs to re-enter the labour market are important,
too.
45. Erasmus +
There has been a positive development since
the financial crisis. While Germany has an
unemployment rate of about 6 % in general, we
only have 4 % in our region.
2
How is the situation here in
Germany?
1
46. Erasmus +
That is great, Dad. Thank you!
Now I know, that we‘re very fine
in our region!
48. Hello! We´re family Müller! And we
will explain the HDI (human
development index) to you today!
49. ,
The HDI shows how much wealth a
country has.The HDI has also the
GDP per person in consideration,as
well as the life expectancy,thewell as the life expectancy,the
duration of education and the
purchasing power.
Purchasing power: The quantity
of goods that can be purchased
with a unit of money
50. Erasmus +
The grading is from 0-1 (1 is the best grade)
Top 3 (2014)
1. Norway (0,944)
2. Australia (0,933)2. Australia (0,933)
3. Switzerland (0,917)
51. Erasmus +
So Leon , they take the
most important factors
of a community i.e. the
education, health &
income then they
calculate it and then
you get a number
between 0 & 1 2 Dad how do you calculatebetween 0 & 1 2 Dad how do you calculate
the HDI? 1
52. Erasmus +
Well we did have some
bad times. But we
managed to make our
way up,nowadays there is
less unemployment, we
have a high wealth and
Oh Lisa, Germany
is currently on the
6th position 2
Mommy, what is
the actual
position of our
country? 1
But daaad, how did
we get to this position
3
have a high wealth and
great education
possibilities 4
53. Erasmus +
And now kids what do you know
about the population in our region
Ostwürttemberg?
54. Erasmus +
So I know that in our area
we have 53 cities with
about 450.000 inhabitants
I know that about 13,75 %
of the population in our
city (Schwäbisch Gmünd)
are foreigners.
55. Erasmus +
• almost everyone who lives here
has a roof over their heads
• because of good working
conditions through companies like:
Weleda, Carl Zeiss, Triumph,
Bosch & Voith.Bosch & Voith.
• we feel very safe here because the
crimie rate is very low
56. Erasmus +
Wow! I´m very impressed of your
knowledge about our region
Ostwürttemberg?
57. Erasmus +
So now you know, what
the HDI is and that we
can do everything
besides speaking
proper German haha
