BellRinger on your white board
1. Who do you think the richest person on your
street is?
2. How do you know?
3. Predict th...
Interview person next to you

1. What is that person’s name?
2. Where are they from? (birth or hometown)
3. What is a ques...
Start with Microeconomics
• Microeconomics – study
of individuals and the
economy
• Macroeconomics – study
of large organi...
Comparing classes?
• On your white boards, what 3 ways could I
compare the economies of my 5 economics
classes?
Gross Domestic Product
• A measure of a country’s economy in a
given time (usually a year or quarter)
2007 Top 10 World Economies
Agree: Front of room

US economy is
growing
Disagree: Back of room
Agree: Front of room

Mexico’s economy
is bigger than
Canada’s
Disagree: Back of room
How do we calculate GDP?
Parts of GDP
• Write something new
you bought last week
• All consumer spending
on new items within a
country in a certain...
Parts of GDP
• All investment within a
country in a certain year,
month or quarter

• IOW: business spending
$$ on capital...
Parts of GDP
• All government
spending in a
country in a certain
year, month or
quarter
• Examples:
education, military,
r...
Parts of GDP
• All net exports from a
country in a certain year,
month or quarter
• Exports = goods
shipped to other
count...
Agree: Front of room

USA imports more
than it exports
Disagree: Back of room
Net Exporters
• A country or territory whose value of
exported goods is higher than its value of
imported goods over a giv...
Net Importers
GDP Calculation
Y=C+I+G+E
where
Y = GDP
C = Consumer Spending
I = Investment
E = Exports - Imports
G = Government Spending
United States GDP 2003
Y=C+I+E+G
$$ in Billions
Consumer Spending = $7605
Investment = $1606
Exports = $1021
Imports = $15...
GDP
• What economic activity did I leave out?

• 2 ways GDP might be misleading?
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

US consumers spend 5% more in 2013,
th...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

US government passes $800 billion
heal...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

US Students learn about the benefits o...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

Bank business lending increases by 7% ...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

Mexican citizens demand 15 % fewer US
...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

The internet is created
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

Americans demand 50% more Mexican
bake...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

NBA plays a game in China, afterwards
...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

US Government cuts
income tax rates by...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

World Demand for American timber
incre...
GDP = C + I + G + (Ex – Im)
Assuming everything else stays equal, what happens if…

US military invades Iran
Calculate the GDP for Portugal in
2008. (in millions)
millions
Consumers spent: $90,000
Investment: $40,000
Exported $50,0...
Portugal
1.

GDP Assignment(It’s the part
Which part of the GDP formula is the largest?

you are the most involved in)
2. How many ...
Macro gdp revised
Macro gdp revised
Macro gdp revised
Macro gdp revised
Macro gdp revised
Macro gdp revised
Macro gdp revised
Macro gdp revised
Macro gdp revised
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Macro gdp revised

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Macro gdp revised

  1. 1. BellRinger on your white board 1. Who do you think the richest person on your street is? 2. How do you know? 3. Predict the country that has the world’s largest economy. We will take some notes today
  2. 2. Interview person next to you 1. What is that person’s name? 2. Where are they from? (birth or hometown) 3. What is a question they have about the economy, economics or this class? (3 ?s in case) 4. Where do they want to be 18 years from now?
  3. 3. Start with Microeconomics • Microeconomics – study of individuals and the economy • Macroeconomics – study of large organizations and countries and the economy • Finance – study of investment and credit
  4. 4. Comparing classes? • On your white boards, what 3 ways could I compare the economies of my 5 economics classes?
  5. 5. Gross Domestic Product • A measure of a country’s economy in a given time (usually a year or quarter)
  6. 6. 2007 Top 10 World Economies
  7. 7. Agree: Front of room US economy is growing Disagree: Back of room
  8. 8. Agree: Front of room Mexico’s economy is bigger than Canada’s Disagree: Back of room
  9. 9. How do we calculate GDP?
  10. 10. Parts of GDP • Write something new you bought last week • All consumer spending on new items within a country in a certain year, month or quarter
  11. 11. Parts of GDP • All investment within a country in a certain year, month or quarter • IOW: business spending $$ on capital goods • Interest rates?
  12. 12. Parts of GDP • All government spending in a country in a certain year, month or quarter • Examples: education, military, roads, healthcare, etc
  13. 13. Parts of GDP • All net exports from a country in a certain year, month or quarter • Exports = goods shipped to other countries • Imports = goods brought into a country from another country • USA? Mexico?
  14. 14. Agree: Front of room USA imports more than it exports Disagree: Back of room
  15. 15. Net Exporters • A country or territory whose value of exported goods is higher than its value of imported goods over a given period of time. • A net exporter is the opposite of a net importer.
  16. 16. Net Importers
  17. 17. GDP Calculation Y=C+I+G+E where Y = GDP C = Consumer Spending I = Investment E = Exports - Imports G = Government Spending
  18. 18. United States GDP 2003 Y=C+I+E+G $$ in Billions Consumer Spending = $7605 Investment = $1606 Exports = $1021 Imports = $1508 Government Spending = $2017 $7605 + 1606 + (1021-1508) + 2017 = $10,741 (2003)
  19. 19. GDP • What economic activity did I leave out? • 2 ways GDP might be misleading?
  20. 20. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… US consumers spend 5% more in 2013, than 2012 for the Winter Holidays.
  21. 21. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… US government passes $800 billion healthcare reform bill
  22. 22. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… US Students learn about the benefits of saving money
  23. 23. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… Bank business lending increases by 7% in 2013
  24. 24. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… Mexican citizens demand 15 % fewer US made cars
  25. 25. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… The internet is created
  26. 26. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… Americans demand 50% more Mexican baked goods
  27. 27. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… NBA plays a game in China, afterwards Chinese people demand more US made basketballs
  28. 28. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… US Government cuts income tax rates by 2 %
  29. 29. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… World Demand for American timber increases
  30. 30. GDP = C + I + G + (Ex – Im) Assuming everything else stays equal, what happens if… US military invades Iran
  31. 31. Calculate the GDP for Portugal in 2008. (in millions) millions Consumers spent: $90,000 Investment: $40,000 Exported $50,000 Imports $90,000 Portugal: 10 million people Currency: Euro Government: $10,000
  32. 32. Portugal
  33. 33. 1. GDP Assignment(It’s the part Which part of the GDP formula is the largest? you are the most involved in) 2. How many recessions has Argentina had since 1900? 3. When was their worst one? 4. Why are recessions good for selling inferior goods? 5. Calculate US GDP 2010 Consumers: $12 trillion Investment: $1.5 trillion Government: $2 trillion Exports: $1 trillion Imports: $2 trillion 6. Describe US Trade (net….?)
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