The document defines key economic concepts such as gross domestic product, the business cycle, inflation, fiscal and monetary policy. It explains that GDP measures total production, the business cycle involves periods of expansion and contraction, and inflation results from too much money supply. Fiscal policy uses government spending and taxes to influence the economy, while monetary policy involves interest rates and the money supply. The document also discusses international trade, noting barriers like tariffs, quotas, and embargoes that countries impose on each other's imports and exports.

1. GOAL 9NC Civics and Economics

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 GDPGDP divided by a countries population In other words: The GDP per person

5. The Business CycleExpansionPeakContractionTrough

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

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

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

9. ExpansionEconomy is IMPROVINGUnemployment is FALLING

10. CPIStands for Consumer Price IndexMeasures inflation rates for the nation’s economyInflation – the general rise in the price of an item over time.

11. Government Economic Regulations

12. Social Security Act of 1935 (SSA)WHAT IT DIDEstablished unemployment, retirement and disability insuranceIMPACT ON US ECONOMYGave 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 DIDCreated the National Labor Relations Board (NLRB)Workers have the right to join unions and use collective bargainingIMPACT ON THE US ECONOMYGave protection and power to the workers

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

15. Taft Hartley Act, 1947WHAT IT DIDPut restrictions on labor unionsEmployee doesn’t have to be a member of the union to be hiredIMPACT ON THE US ECONOMYUnions 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-marketsRemoves gov’t restrictions like entry barriers and price controls

17. United States and International Trade

18. NAFTANorth American Free Trade Agreementgoal to eliminate all tariffs and trade barriers between Canada, the United States, and Mexico by 2009.

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

20. Barriers to Free TradeTariffsQuotasEmbargoes

21. TariffsTaxes placed on imported goodsincrease the price and cost of shipping items

22. QuotasLimits placed on itemsEx. Import Quota – a limit on the amount of a good that can be importedThe U.S.A. can only import…908, 764 kilograms of raw cotton from India and Pakistan.621,780 kilograms of raw cotton from China355,532 kilograms of raw cotton from Egypt and Sudan

23. Embargoespolitical tools used to economically hurt another country by not trading with them Ex: CUBAU.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. Taxes

26. Regressive TaxPurpose:As income increases, the percentage of taxes paid decreasesHurts the poorExample:Sales Tax

27. Progressive TaxPurpose:As income increases the percentage of taxes paid increasesHurts the richExamples:Income Tax

28. Excise TaxPurpose:A tax on the sale or production of luxury or harmful goodsExamples:Tax on cigarettes, alcohol, gasoline

29. Interest RateA percentage that is charged or paid for borrowing moneyHigher interest rate=less spending/borrowing

30. Fiscal & Monetary Policy

31. What is the purpose of Fiscal and Monetary Polices?To ensure economic expansions and contractions are not to severeNOT

32. Fiscal PolicyThe use of government (Congress) spending and revenue collection to influence the economy.

33. MONETARY POLICYThe actions taken by the Federal Reserve to influence the stability of the economy

34. Economic Problem: InflationOccurs when the market is flooded with too much money in the hands of consumersSo… the Goal is to DECREASE the amount of $ in the hands of consumers

35. Fiscal Policy(Congress) (Increase) Taxes (Decrease) Gov’t Spending (Decrease) Welfare paymentsTIGHT Fiscal Policy

36. Monetary Policy(Federal Reserve) (Increase) Interest (Discount) Rates (Increase) Reserve Ratio Sell BondsTIGHT Monetary Policy

37. Economic Problem: UnemploymentOccurs 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

38. Fiscal Policy(Congress) (Decrease) Taxes (Increase) Gov’t Spending (Increase) Welfare paymentsLOOSE Fiscal Policy

39. Monetary Policy(Federal Reserve) (Decrease) Interest (Discount) Rates (Decrease) Reserve Ratio Buy BondsLOOSE Monetary Policy

40. REQUIRED RESERVE RATIOMoney the banks have to keep “RESERVE” at the bank.

41. DISCOUNT RATIOThe interest rate the federal reserve charges banks to borrow money.FYI – this is one that the name does not match what it is but you just have to remember

42. BONDSSold by the federal reserve and increases in value over time

43. FEDERAL RESERVEThe bank owned by the Federal government. Does not work with the public only with other banks.

44. United States and International Trade

45. NAFTANorth American Free Trade AgreementNAFTA impacts the United States because its goal is to eliminate all tariffs and trade barriers between Canada, the United States, and Mexico by 2009.

46. InterdependenceWhen countries rely on each other for certain goods.

47. Barriers to Free TradeTariffsQuotasEmbargoes

48. TariffsTaxes placed on imported goodsThese increase the price and cost of shipping items to consumers in other countriesEx. Customs Duty - a tax placed on certain items purchased in other countries

49. QuotasLimits placed on itemsEx. Import Quota – a limit on the amount of a good that can be importedThe U.S.A. can only import…908, 764 kilograms of raw cotton from India and Pakistan.621,780 kilograms of raw cotton from China355,532 kilograms of raw cotton from Egypt and Sudan

50. EmbargoesAre political tools used to economically hurt another country by not trading with them.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.

51. Balance of TradeThe monetary difference between the exports and imports of merchandise.Charts demonstrate a countries unfavorable balance of trade by showing the countries exports are less than their imports