Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Economics CP Chapter 13 Economic Challenges
Types of Unemployment <ul><li>Frictional Unemployment – people unemployed & looking for a job that better suits them </li>...
Types of Unemployment <ul><li>Cyclical Unemployment – increases when economy contracts; decreases when economy expands </l...
 
Measuring Unemployment <ul><li>Department of Labor, Bureau of Labor Statistics </li></ul><ul><li>Determine unemployment ra...
Full Employment <ul><li>Do not want 0% unemployment – no room for expansion in economy </li></ul><ul><li>4-6% is ideal – c...
Other employment terminology <ul><li>Underemployed – working at a job for which they are overqualified or working part-tim...
 
Chapter 13 Section 2 Inflation
Inflation <ul><li>(don’t write) Fact: Prices have a tendency to increase over time </li></ul><ul><li>Inflation: general in...
Determining Inflation <ul><li>Need a price index – measurement of how the average price of a group of goods changed over t...
Major Price Indices (3 of ‘em) <ul><li>1.  CPI  – Consumer Price Index </li></ul><ul><ul><li>200 items in market basket (c...
 
 
Major Price Indices <ul><li>2.  PCE  – Personal Consumption Expenditure </li></ul><ul><ul><li>Asks individuals how much sp...
Major Price Indices <ul><li>3.  PPI  – Producer Price Index </li></ul><ul><ul><li>Cost of goods at intermediate states of ...
Inflation rate <ul><li>Def: % rate of change in price level over time </li></ul><ul><li>Ideally: 1-3%; 5% = instability </...
It’s time for a simulation … also known as … Why can’t the government just print as much money as possible?
Causes of Inflation <ul><li>quantity theory : too much $$$ in the economy; eliminate this by increasing the money supply a...
Causes of Inflation <ul><li>demand-pull theory : “too many dollars chase too few goods” </li></ul><ul><ul><li>demand for g...
Causes of Inflation <ul><li>cost-push theory : inflation occurs when producers increase prices to meet increased costs </l...
Effects of Inflation <ul><li>weakens purchasing power </li></ul><ul><li>income: must “keep up” with inflation; people on f...
Inflation in History <ul><li>Inflation has been low since the 1970s oil embargo </li></ul><ul><li>Because of high unemploy...
 
Chapter 13 Section 3 Poverty
Defining Poverty <ul><li>Poverty threshold – income level below which income is insufficient to support a family/ househol...
Defining Poverty <ul><li>Poverty rate: % of people who live in households with income below poverty threshold  </li></ul><...
Causes of Poverty <ul><li>Not lack of work: </li></ul><ul><ul><li>Head of Household makes $8.00/ hour and works 40 hours/ ...
Causes of Poverty <ul><li>LACK OF EDUCATION!!! </li></ul><ul><ul><li>Median income of HS dropout: $18,344 </li></ul></ul><...
Causes of Poverty <ul><li>2. Location </li></ul><ul><li>inner city v. suburbs v. rural </li></ul><ul><li>cost of living NO...
Causes of Poverty <ul><li>3. Racial/ gender discrimination </li></ul><ul><li>4. Economic shifts </li></ul><ul><li>5. Famil...
Upcoming SlideShare
Loading in …5
×

Economics cp chapter 13 power point

3,995 views

Published on

Published in: Education
  • Be the first to comment

  • Be the first to like this

Economics cp chapter 13 power point

  1. 1. Economics CP Chapter 13 Economic Challenges
  2. 2. Types of Unemployment <ul><li>Frictional Unemployment – people unemployed & looking for a job that better suits them </li></ul><ul><li>Seasonal Unemployment – unemployment as a result of seasonal schedules, vacation, or when industry slows or shuts down for season </li></ul>
  3. 3. Types of Unemployment <ul><li>Cyclical Unemployment – increases when economy contracts; decreases when economy expands </li></ul><ul><li>Structural Unemployment – unemployment because worker’s skills do not match available jobs; occurs b/c economy changes </li></ul><ul><li>5 causes: </li></ul><ul><ul><li>New technology </li></ul></ul><ul><ul><li>New resources </li></ul></ul><ul><ul><li>Changes in consumer demand </li></ul></ul><ul><ul><li>Globalization </li></ul></ul><ul><ul><li>Lack of education </li></ul></ul>
  4. 5. Measuring Unemployment <ul><li>Department of Labor, Bureau of Labor Statistics </li></ul><ul><li>Determine unemployment rate – national, state, county level </li></ul><ul><ul><li>Latest Unemployment Data </li></ul></ul><ul><li>Seasonally adjusted </li></ul>
  5. 6. Full Employment <ul><li>Do not want 0% unemployment – no room for expansion in economy </li></ul><ul><li>4-6% is ideal – currently 9% </li></ul>
  6. 7. Other employment terminology <ul><li>Underemployed – working at a job for which they are overqualified or working part-time & want full-time work </li></ul><ul><li>Discouraged worker – gave up looking for a job; not considered in unemployment % </li></ul>
  7. 9. Chapter 13 Section 2 Inflation
  8. 10. Inflation <ul><li>(don’t write) Fact: Prices have a tendency to increase over time </li></ul><ul><li>Inflation: general increase in prices </li></ul><ul><li>Purchasing Power: ability to purchase goods & services </li></ul><ul><li>When an increase in inflation causes a decrease in purchasing power , it is problematic! </li></ul>
  9. 11. Determining Inflation <ul><li>Need a price index – measurement of how the average price of a group of goods changed over time </li></ul><ul><li>Indices used for </li></ul><ul><ul><li>consumers to change spending habits </li></ul></ul><ul><ul><li>gov’t to adjust payments </li></ul></ul><ul><ul><li>unions to demand wages </li></ul></ul>
  10. 12. Major Price Indices (3 of ‘em) <ul><li>1. CPI – Consumer Price Index </li></ul><ul><ul><li>200 items in market basket (collection of goods/ services) </li></ul></ul><ul><ul><li>measured monthly </li></ul></ul><ul><ul><li>“urban goods” </li></ul></ul><ul><ul><li>base year (1982-1984) assigned 100 </li></ul></ul>
  11. 15. Major Price Indices <ul><li>2. PCE – Personal Consumption Expenditure </li></ul><ul><ul><li>Asks individuals how much spent in month </li></ul></ul><ul><ul><li>Eliminates problem of substitutes </li></ul></ul>
  12. 16. Major Price Indices <ul><li>3. PPI – Producer Price Index </li></ul><ul><ul><li>Cost of goods at intermediate states of production </li></ul></ul><ul><ul><li>Precursor to increase of CPI or PCE </li></ul></ul>
  13. 17. Inflation rate <ul><li>Def: % rate of change in price level over time </li></ul><ul><li>Ideally: 1-3%; 5% = instability </li></ul><ul><li>Often food & energy prices increase inflation; core inflation rate = inflation rate calculated w/o food & energy </li></ul><ul><li>Hyperinflation = inflation out of control; 100% to 500% per year; economic collapse </li></ul>
  14. 18. It’s time for a simulation … also known as … Why can’t the government just print as much money as possible?
  15. 19. Causes of Inflation <ul><li>quantity theory : too much $$$ in the economy; eliminate this by increasing the money supply at the same rate in which the economy is growing </li></ul>
  16. 20. Causes of Inflation <ul><li>demand-pull theory : “too many dollars chase too few goods” </li></ul><ul><ul><li>demand for goods & services exceed increasing supplies </li></ul></ul>
  17. 21. Causes of Inflation <ul><li>cost-push theory : inflation occurs when producers increase prices to meet increased costs </li></ul><ul><ul><li>led by wage increase b/c low unemployment cause companies to compete for workers </li></ul></ul><ul><ul><li>wage price spiral : rising wages cause higher prices; higher prices cause higher wages(p. 342) </li></ul></ul>
  18. 22. Effects of Inflation <ul><li>weakens purchasing power </li></ul><ul><li>income: must “keep up” with inflation; people on fixed income especially impacted </li></ul><ul><li>Interest rate: amount truly gained on savings may depend on rates </li></ul>
  19. 23. Inflation in History <ul><li>Inflation has been low since the 1970s oil embargo </li></ul><ul><li>Because of high unemployment right now, little chance of inflation except in energy costs </li></ul>
  20. 25. Chapter 13 Section 3 Poverty
  21. 26. Defining Poverty <ul><li>Poverty threshold – income level below which income is insufficient to support a family/ household </li></ul>37,010 8 33,270 7 29,530 6 25,790 5 22,050 4 18,310 3 14,570 2 $10,830 1 Poverty guideline Persons in family
  22. 27. Defining Poverty <ul><li>Poverty rate: % of people who live in households with income below poverty threshold </li></ul><ul><li>Children are highest age group in poverty </li></ul>
  23. 28. Causes of Poverty <ul><li>Not lack of work: </li></ul><ul><ul><li>Head of Household makes $8.00/ hour and works 40 hours/ week </li></ul></ul><ul><ul><li>Weekly income: $320; 52 weeks/ year: $16,640/ week </li></ul></ul><ul><ul><li>Check out the poverty guidelines; At what sized household will he/ she be in poverty? </li></ul></ul>
  24. 29. Causes of Poverty <ul><li>LACK OF EDUCATION!!! </li></ul><ul><ul><li>Median income of HS dropout: $18,344 </li></ul></ul><ul><ul><li>HS grad earns 1/3 more; $24,458 </li></ul></ul><ul><ul><li>College grad 3 times more: 55,032 </li></ul></ul>
  25. 30. Causes of Poverty <ul><li>2. Location </li></ul><ul><li>inner city v. suburbs v. rural </li></ul><ul><li>cost of living NOT considered </li></ul>
  26. 31. Causes of Poverty <ul><li>3. Racial/ gender discrimination </li></ul><ul><li>4. Economic shifts </li></ul><ul><li>5. Family structures </li></ul>

×