American Business

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American Business

• Leslie Lum
• Bellevue College

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Icebreaker
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Brainstorming

• Brainstorming is a group technique to generate as
  many ideas as possible. We are going to
  brainstorm in groups about What is a business?
• What is the context of a business? What
  environment does it operate in?
• Form a group
• Brainstorm what a business is
• Draw a picture of your ideas
• Report back to the class

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What is the economy?
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Part of the U.S. economy?

• Building a house in New Mexico
• Toyota cars assembled in Kentucky
• Hair salon in South Dakota
• Seattle SuperSonics
• Coca Cola plant in China

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Who wants to be a millionaire--
What is the size of the US economy? How does it
compare to the rest of the world?
http//www.worldbank.org/data/quickreference/quick
ref.html
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Relative GDP (Nominal vs PPP)(wikipedia.com)
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GDP per capita (person)(wikipedia.com)
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Measuring the economy
Value of goods and services are totaled.
GDP adjusted for inflation.
Growth is graphed.
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The rate of change of GDP

• Growth
• Period of Expansion
• Contraction
• Recession

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REAL GDP
http//www.whitehouse.gov/fsbr/esbr.html
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Change in Real GDP
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Inflation

• Increase in the price of goods and services
• How do we measure it?
• Is it good or bad?
• What has been the inflation rate for the past 30
  years?

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What consumers spend
http//nytimes.com/interactive/2008/05/03/business
/20080403_SPENDING_GRAPHIC.html
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Consumer Price Index
http//www.bls.gov/cpi/home.htmtables
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Inflation
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Inflation
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How does the US compare?
http//www.nationmaster.com/graph-T/eco_inf_rat_co
n_pri
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Role of Government

• Monetary Policy - Federal Reserve sets interest
  rates
• Fiscal Policy - Spending to stimulate economy

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Can the Government afford to help?
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Can the Government afford to help?
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Monetary Policy - How it works
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The Whole Picture

• The Business Cycle is crucial to business planning

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How to avoid finding yourself in the middle of a
recession

• Important to look ahead
• Predict upturns and downturns

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Economic indicators

• Construction
• Manufacturers shipments, inventories, orders
• Employment
• Consumer credit
• Wholesale trade
• Capacity

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GDP Output by Industry
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Not all industries are growing or contracting at
the same rate
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Shifts in the American Economy

• Where should you be?

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Key terms to analyze and know (as on test)

• Economy
• GDP, Real GDP growth
• GDP per capita
• Inflation (Consumer Price Index)
• Business Cycle (expansion, contraction, peak,
  trough)
• GDP output by industry
• Economic indicators