NC Civics and Economics PPT Goal 9

1. Goal 9

2. Gross Domestic Product and The Business Cycle

3. Gross Domestic Product(GDP) A measurement of all that is produced within a country in one year.

4. Per Capita GDP GDP divided by a countries population In other words: The GDP per person

5. The Business Cycle Expansion Peak Contraction Trough

6. Peak (a.k.a. “Boom”) Economy is at its HIGHEST Unemployment at its LOWEST

7. Contraction (a.k.a. “Recession”) Economy is DECLINING Unemployment is RISING

8. Trough (a.k.a. “Depression”) Economy is at its LOWEST Unemployment is at its HIGHEST

9. Expansion Economy is IMPROVING Unemployment is FALLING

10. CPI Stands for Consumer Price Index Measures inflation rates for the nation’s economy Inflation – the general rise in the price of an item over time.

11. Government Economic Regulations

12. Social Security Act of 1935 (SSA) WHAT IT DID Established unemployment, retirement and disability insurance IMPACT ON US ECONOMY Gave citizens a sense of security if they were to have hard times (secure with your money =spending money=better economy)

13. National Labor Relations Act, 1935 WHAT IT DID Created the National Labor Relations Board (NLRB) Workers have the right to join unions and use collective bargaining IMPACT ON THE US ECONOMY Gave protection and power to the workers

14. Fair Labor Act, 1938 WHAT IT DID Est. the 1st minimum wage of 25 cents per hour and time and a half for working over 40 hours per week IMPACT ON THE US ECONOMY Workers must be treated fairly and paid accordingly

15. Taft Hartley Act, 1947 WHAT IT DID Put restrictions on labor unions Employee doesn’t have to be a member of the union to be hired IMPACT ON THE US ECONOMY Unions cannot be all powerful President can delay a union strike for 80 days if it will threaten “national health or safety”

16. How might government deregulation affect the US Economy? Allows firms to compete in free-markets Removes gov’t restrictions like entry barriers and price controls

17. United States and International Trade

18. NAFTA North American Free Trade Agreement goal to eliminate all tariffs and trade barriers between Canada, the United States, and Mexico by 2009.

19. Interdependence Countries are dependent on one another in order to focus on what they have an advantage in producing.

20. Barriers to Free Trade Tariffs Quotas Embargoes

21. Tariffs Taxes placed on imported goods increase the price and cost of shipping items

22. Quotas Limits placed on items Ex. Import Quota – a limit on the amount of a good that can be imported The U.S.A. can only import… 908, 764 kilograms of raw cotton from India and Pakistan. 621,780 kilograms of raw cotton from China 355,532 kilograms of raw cotton from Egypt and Sudan

23. Embargoes political tools used to economically hurt another country by not trading with them Ex: CUBA U.S. Trade Embargo against Cuba. It is illegal to trade with companies in Cuba, we disagree with the communist ruler Fidel Castro and his government. We are hurting Cuba economically by not trading and raising the living standards of the country.

24. Question? How does the table on p.3 of your qualifier illustrate the United States unfavorable balance of trade? The US’s imports are greater than its exports. The balance is negative so the balance of trade is unfavorable.

25. Fiscal & Monetary Policy

26. What is the purpose of Fiscal and Monetary Polices? To ensure economic expansions and contractions are not too severe NOT

28. Economic Problem: Inflation Occurs when the market is flooded with too much money in the hands of consumers So… the Goal is to DECREASE the amount of $ in the hands of consumers

29. Fiscal Policy(Congress) (Increase) Taxes (Decrease) Gov’t Spending (Decrease) Welfare payments TIGHTFiscal Policy

30. Monetary Policy(Federal Reserve) (Increase) Interest (Discount) Rates (Increase) Reserve Ratio Sell Bonds TIGHT Monetary Policy

31. Economic Problem: Unemployment Occurs when the market slows down due to a lack of consumer spending. So… the Goal is to INCREASE the amount of $ in the hands of consumers People have too little money

32. Fiscal Policy(Congress) (Decrease) Taxes (Increase) Gov’t Spending (Increase) Welfare payments LOOSE Fiscal Policy

33. Monetary Policy(Federal Reserve) (Decrease) Interest (Discount) Rates (Decrease) Reserve Ratio Buy Bonds LOOSE Monetary Policy

34. Taxes

35. Regressive Tax Purpose: As income increases, the percentage of taxes paid decreases Hurts the poor Example: Sales Tax

36. Progressive Tax Purpose: As income increases the percentage of taxes paid increases Hurts the rich Examples: Income Tax

37. Excise Tax Purpose: A tax on the sale or production of luxury or harmful goods Examples: Tax on cigarettes, alcohol, gasoline

38. Interest Rate A percentage that is charged or paid for borrowing money Higher interest rate=less spending/borrowing