The Root Beer Game Debrief

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Unit 2 Macro Measures and International Trade
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THE BUSINESS CYCLE
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1. Define Macroeconomics
2. What are the 3 economic goals that all countries
   have
3. Identify the 3 key parts of the definition of GDP
4. How do we use GDP
5. Identify w hat is NOT included in GDP
6. List the 4 components of GDP
7. Define Inflation
8. Explain the difference between Nominal and Real
   GDP
9. Explain Real GDP per Capita
10. Name 10 Disney Movies

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Paul Solman Video The Roller Coaster Ride
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THE BUSINESS CYCLE
The national economy fluctuates resulting in
periods of boom and bust.
Inflation
Unemployment
Full employment
A Recession is 6 month period of decline in
output, income, employment, and trade. (If really
badthen depression)
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200 Years of the Business Cycle

1. Why is the business cycle like a roller coaster?
2. How do wars affect the economy?

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The Business Cycle
Why does the economy fluctuate?

• Retailer and Producers send misleading
  information about consumer demand.
• Advances in tech, productivity, or resources.
• Outside influences (wars, supply shocks, panic).

Who cares?

• Macroeconomics measures these fluctuations and
  guides policies to keep the economy stable.
• The government has the responsibility to
• Promote long-term growth.
• Prevent unemployment (resulting from a bust).
• Prevent inflation (resulting form a boom).

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2010 GDP Growth Rate 2.8
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What is Economic Growth?

1. An increase in real GDP over time
2. An increase in real GDP per capita over time
   (usually used to determine standard of living)

• Why is economic growth the goal of every society?
• Provides better goods and services
• Increases wages and standard of living
• Allows more leisure time
• Economy can better meet wants

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Connection to PPC

• The same information shown on the business cycle
  can be shown on a production possibilities curve.
• Full employment
• Unemployment
• Inflation
• The shifters of the PPC affect GDP
• Change in quantity/quality of resources
• Changes in technology
• Changes in trade