Chapter 2

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Chapter 2

  1. 1. Chapter 2 Measuring Economic Activity
  2. 2. GDP • Gross Domestic Product • Total dollar value of all final goods and services produced in a country during one year.
  3. 3. GDP per capita • Gross Domestic Product • Output per person • Divide GDP by the total population
  4. 4. Unemployment Rate • The portion of people in the labor force who are not working. • People are considered unemployed if they are looking for work and willing to work but unable to find a job.
  5. 5. Productivity • Output per worker • Examples: Improvements in equipment or technology, training, management techniques, etc.
  6. 6. Personal Income • Salaries and wages as well as investment income and government payments to individuals. • Provide foundation for buying goods and services.
  7. 7. Retail Sales • Sales of durable and non-duralable goods bought by consumers. • Indicator of general consumer spending
  8. 8. Business Cycle PROSPERITY RECESSION DEPRESSION RECOVERY
  9. 9. Business Cycle PROSPERITY • Period in which most people who want to are working • Businesses produce goods and services in record numbers, wages are good, and the rate of GDP growth increases.
  10. 10. Business Cycle RECESSION • A period in which demand begins to decrease, business lower production • Unemployment begins to rise • GDP growth slows
  11. 11. Business Cycle DEPRESSION • A phase marked by a prolonged period of high unemployment • Weak consumers sales • Business failures
  12. 12. Business Cycle RECOVERY • A phase in which unemployment begins to decrease • Demand for goods and services increases • GDP begins to rise
  13. 13. Inflation • An increase in the general level of prices. • Buying power of the dollar decreases
  14. 14. Deflation • Decrease in general level of prices • Usually happens with investment rates
  15. 15. National Debt • The total amount owned by the federal government
  16. 16. Chapter 1 and 2 REVIEW In your book… Communicate Business Concepts Chapter 1 – 1, 2, and 5 (pg 28) Chapter 2 – 1, 4, and 5 (pg 48)

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