Name ____________________ Class __________ Date __________
POB 1.02 (Page 1) Measuring Economic Activities Organizer
Directions: Provide the requested information.
Ways to Measure Economic Activities
1. Describe Gross
Domestic Product
(GDP)
A country’s
_________________
value of all
_________________
_________________
produced in
____________year.
Most commonly used
measure to
determine a
country’s overall
economic growth
Write the major categories and other examples, as
possible, of economic activities included in the GDP
______________
spending:
For food,
clothing, housing,
other consumer
items
______________
spending:
For buildings,
equipment,
inventory
Example
Example
House valued at
$180, 000, lawn
service
$5000 monthly
lease for a
beauty salon
______________
spending:
For employee
pay, and to
purchase
supplies and
other goods and
services
Example
Purchase military
equipment
______________
______________
______________
Exports &
imports:
____________
out of the country
__________
_____________
into the country
POB 1.02 (Page 2) Measuring Economic Activities Organizer Continued
2. GDP per
capita
means
output per
person
=
___________
÷
_____________
_____________
_____________
3. Labor
Activities
Employment
Which people are included in the unemployment rate?
includes the people of the labor force _____________________________________,
but _______________________, are _________________________________, but
____________________________________________________________________.
Productivity: The ______________________________________________________
(by a worker.)
How can productivity be increased?
• _____________________________________________________
Examples
Sheetz convenience store provides touch-screen computers for customers to place
food orders instead of sales associates taking food orders.
_____________________________________________________________________
_____________________________________________________________________
___________________________________________________
Measuring Economic Activities Organizer Continued
4. Consumer Spending
List and describe the economic indicators for consumer spending:
 Personal Income: includes the total wages and salaries plus investment income
and government payments to individuals.
 Retail Sales: sales of durable and non durable goods and services purchased by
consumers (autos, building materials, furniture, gas, $ spent at restaurants, etc)
5. Investment Activities
Describe how the listed investment activities promote economic growth:
Personal Savings
People and businesses
deposit money in bank
savings accounts. Banks
then lend this money to
businesses which use the
borrowed money to buy
equipment or products for
their businesses.
Savers, in turn, earn
interest on money used by
companies and other
individuals.
Examples
Mary has saved over $800
in a local bank.
Jack borrowed $600 from a
local bank to buy a new
oven.
______________________
______________________
______________________
The Stock Market
The Bond Market
Stock represents ownership
in a company. If a
company wants to expand,
it can sell stock to raise
money.
Higher earnings for
businesses increases their
value, which causes a
demand for people wanting
to buy the businesses
stock.
Examples
Jason purchased stock of a
pharmaceutical company.
Bonds represent debt for a
company. If a company
wants to expand, it can sell
bonds to raise money.
Bondholders purchase the
bonds, and earn interest on
the money they have
loaned to businesses and
the government.
Eventually, the company
pays the bondholders back
their money, with interest.
Examples
The bond passed to fund
several city parks.
______________________
______________________
______________________
______________________
______________________
______________________
Measuring Economic Activities Organizer Continued
6. Borrowing Activities
Government
Describe how government borrowing can
lead to a budget deficit.
Businesses
Describe how using borrowed money
wisely can impact businesses.
By Governments: If governments want to
spend more than they brings in through
taxes and fees, they may have to borrow
money. This overspending is known as a
budget deficit.
Companies may borrow money to start up or
expand. Using borrowed funds efficiently can result
in an increase in sales and profits.
Name_________________________
Class ________________ Date _________
Very Important Business Terms Activity
Directions: In the right-hand column of the table, describe why the terms listed in the
left-hand column are important.
Measuring Economic Activities
Very Important
Why is the term important to the topic?
Business Terms
Gross domestic
Example: GDP indicates the health and growth of an economy.
product (GDP)
If the GDP for a country is steadily increasing, this is usually an
indication of higher demands for goods and services. A higher
demand for goods and services result in more goods and
services being produced.
GDP per capita
Productivity
Personal income
Retail sales
Capital projects
Very Important Business Terms Continued
Stock
Bond
Economic Conditions
Business cycle
Prosperity
Recession
Depression
Recovery
Inflation
Deflation
Name ____________________ Class __________ Date __________
GDP Map Activity
Directions: Select three countries of your choice from the website
www.theodora.com/wfb and obtain requested information about each one.
"english.freemap.jp." Free blank outline world maps. 11 Jan 2006. Sankakukei, InoueKeisuke. 14 Nov 2008
<http://english.freemap.jp/world_e/img/4/2.gif>.
Part 1
GDP last year
Population last year
GDP per capita last
year
GDP two years ago
Population two
years ago
GDP per capita two
years ago
Country 1
Country 2
Country 3
GDP Map Continued
Part 2
Using each country’s GDP for one and two years ago, write a statement about each
one’s economic performance.
Country 1 ___________________________________________________________
Country 2 ___________________________________________________________
Country 3 ___________________________________________________________
Part 3
Using each country’s GDP per capita for one and two years ago, write a statement
about each one’s economic performance.
Country 1 ___________________________________________________________
Country 2 ___________________________________________________________
Country 3 ___________________________________________________________
Name ____________________ Class __________ Date __________
Economic Conditions Organizer
Directions: Provide the name and a brief description in your words of each phase of the business cycle.
Part A
The Four Phases of the Business Cycle
Prosperity
Recession
Recovery
Depression
Economic Conditions Organizer Continued
Part B
Situation
Employment
trend
Supply and
demand of
goods and
services trend
Possible
actions of
businesses
Prosperity
Recession
Unemployment
increases as workers
are laid off.
Depression
Prolonged period of high
unemployment
Recovery
Unemployment
decreases companies
begin to rehire workers
Demand decreases as
people lose jobs;
GDP: growth slows for
2 or more quarters
Demand for products
and services is very
weak; GDP falls rapidly
Demand increases; GDP
begins to rise
Businesses decrease
Profits strong as is
production as demand
production
decreases; profits
Companies hiring &
suffer Businesses may
expanding (Macy’s
strategize on ways to
may open more stores) stimulate demand for
goods & services
Business failures and
closings increase;
companies make
changes (such as
moving employees from
full time to part time to
decrease hours and
reduce benefits) just to
stay open
Businesses begin
rehiring and increasing
production; companies
may again begin
recruiting efforts at
colleges
Labor: People who
want to work are
working;
unemployment low
Wages: Good
GDP: Increasing
Consumer Demand:
Increasing
Economic Conditions Organizer Continued
Consumer Prices
Inflation
Deflation
Define: Increase in the general level of prices. Define: Decrease in the general level of prices.
How may high demand and limited supply of
products cause inflation? You have a lot of
dollars (high demand) chasing fewer products
(limited supply). Businesses therefore raise
How do lower prices impact deflation?
prices, and those with more money can
Usually occurs during periods of recession and
purchase goods.
depression. Prices go down, prices go down, but
if people have lost their jobs, they still don’t have
How is the consumer price index calculated? enough money to buy things. Business make
The value of a group of products (things we
less of a profit, continue to layoff workers, etc.
commonly purchase) is compared to a
previous year’s value. If the prices go up from Example of CPI:
year to year, this is inflation.
Price of IPod this year: $299
How does inflation impact consumer buying
Price of IPod last year: $249
power? Buying power decreases; takes more Increase:
$50
$$ to buy the same items as before.
Formula: Increase (or decrease) 50
Last year’s price
249= 20%
Part D
List the primary saving or borrowing purpose for each type of interest rates
Interest rates: the cost of borrowing money
Prime Rate: Rate banks charge their best customers to borrow money (mostly large corporations
Discount Rate: Interest rate banks pay to borrow money from the Federal Reserve (govt)
T-Bill Rate: Yield (savings rate) earned by investors on short-term (13 week) debt (bonds) issued
by the federal government
Treasury Bond Rate: Yield (savings rate) earned by investors on long term (20 year) debt
(bonds) issued by the federal government
Mortgage rate: Interest rate paid to the lender to borrow money for a home loan
Corporate Bond rate: Yield (savings rate) earned by investors on debt issued by large
corporations
Certificate of Deposit (CD) rate: Yield on savings earned by investors for depositing their money
with banks for specified periods of time
How do interest rates impact businesses? Interest rates for borrowing have a strong
influence on businesses. Higher interest rates for loans and debt mean higher
expenses (costs) for businesses. Many times, businesses pass these increased costs
on to consumers in the form of higher prices for goods and services.