Chapter 3 revised

Chapter 3 revised

• 1.
  Economic Activity ina Changing World Chapter 3 pp. 34-47
• 2.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 2 of 55 Gross Domestic Product (GDP) One way of telling how well an economy is performing is to determine how many goods and services it produces during a certain period of time.
• 3.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 3 of 55 Gross Domestic Product (GDP) The standard of living is the amount of goods and services the average citizen can buy.
• 4.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 4 of 55 Rate of Inflation Inflation is a general increase in the cost of goods and services. Inflation can happen when an economy actually becomes too productive.
• 5.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 5 of 55 Rate of Inflation Deflation is a general decrease in the cost of goods and services. When an economy produces more goods than people want, it has to lower prices and cut production.
• 6.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 6 of 55 National Debt When the government spends more on programs than it collects in taxes, the difference in the amount is called the budget deficit.
• 7.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 7 of 55 National Debt The total amount of money a government owes is its national debt. If the debt gets too large, a nation can become dependent on other nations or unable to borrow any more money.
• 8.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 8 of 55 National Debt If a nation spends less than its income, it has a budget surplus. The government will probably use a surplus to cut taxes, reduce the national debt, or increase spending for certain programs.
• 9.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 9 of 55 The Business Cycle Over long periods of time economic changes seem to form patterns. The rise and fall of economic activity over time is called the business cycle.
• 10.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 10 of 55 Figure 3.2 BUSINESS CYCLE MODEL The repeated rise and fall of economic activity over time is called a business cycle. What are the four phases of the cycle?
• 11.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 11 of 55 Measuring Economic Activity Economic indicators are figures used to measure economic performance.
• 12.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 12 of 55 Measuring Economic Activity Economic indicators measure things like how much a country is producing, whether its economy is growing, and how it compares to other countries.
• 13.
  Chapter 3 Introduction toBusiness, Economic Activity in a Changing World Slide 13 of 55 Unemployment Rate The unemployment rate measures the number of people who are able to work but don’t have a job during a given period of time.