Mahvelous Monday, February 24Warm up: Create an index card that explains the difference between real vs. nominal GDP. Also list the categories of goods that are not included in GDP.
USATP Unit 3 #1 due next Monday, March 2 by midnight
Agenda: Warm up review of GDP (10 min); Work period: notes on GDP and inflation; calculate student price index (50 min); Closing: what questions do you have about GDP?
“[Delaware] offered me a good amount of scholarship and grant money. . . . My family was not affluent at all, and it made a huge difference. The second reason was, I went down there
and visited--it’s strange the way you make decisions when you’re seventeen or eighteen--and everybody seemed happy
and everybody seemed to be enjoying themselves. The campus was nice and it was relatively close to home. It
wasn’t a whole lot more complicated than that.” -Chris Christie, Governor of New Jersey and 2016 presidential candidate, about choosing U. of DE
Source: Bruni, Frank. Where You Go Is Not Who You’ll Be: An Antidote to the College Admissions Mania. New York, Hachette Book Group, 2016.
VIDEO (TO 3:15)
WHAT IS GDP?
NOT INCLUDED IN GDP:
1. Second-hand sales (e.g., a used car) 2. Intermediate products (like flour used to make a
loaf of bread, or new tires that a car company buys to put on its cars)
3. Non-market transactions (e.g., a summer job mowing neighbors’ lawns; babysitting)
4. Financial transactions (e.g., buying or selling stock)5. Underground economy (e.g., gambling, illegal
drugs)
■ Cost of cotton for a t-shirt: intermediate good (NOT COUNTED)
■ Cost of T-shirt: COUNTED
■ Cost of flour for a baker:Intermediate (NOT COUNTED)■ Cost of cake: COUNTED
What counts for GDP?
GDP Practice
• IF THE U.S. AND CHINA HAVE THE 1ST AND 2ND LARGEST ECONOMIES, WHO ELSE IS IN THE TOP 10 GDPS?
13Copyright ACDC Leadership 2018
GDP PER CAPITA = REAL GDP ÷ POPULATION
• Is the best measurement of a country's standard of living (wealth, comfort, material goods, and necessities available).
• Shows how wealthy or well-off a country feels to its citizens
• It is NOT the average income of citizens
MAKE A PREDICTION
Now that you know what countries have the biggest GDP, make a prediction about what countries have large GDP per capita.
WHAT IS INFLATION AND HOW DO WE MEASURE IT?
Economic Mystery: Was Babe Ruth underpaid?
• In 1931, Babe Ruth made $80,000 per
year.
• Also in ‘31, an ice-cream cone cost five
cents and going to a movie in a theater
cost a quarter.
• On average, Major League Baseball
players today earn $2,272,620 per
year.
Price Stability: The Bambino• Ruth's salary in constant 2005 dollars was
about $1 million per year.
• In 2005, Alex Rodriguez of the New York
Yankees was the highest-paid MLB player
at $22 million per year.
• In 2005, 426 MLB players made the same
as or more than the great Babe Ruth.
Too Much Tuesday, February 25Warm up: On your green (?) unit 3 overview sheet, underline the standards we have covered so far and put a * by the vocabulary terms we have covered.
Learning target: I can define inflation, deflation and hyperinflation. I can define CPI (Consumer Price Index) and explain how it is used to calculate inflation.
USATP Unit 3 #1 due next Monday, March 2 by midnight
Agenda: Warm up review of standards (10 min); Work period: notes on inflation; calculate student price index (50 min); Closing: what questions do you have about inflation?
WHAT IS Inflation?
• INFLATION = an increase in the AVERAGE PRICE LEVEL in an economy
• Inflation causes the value of the dollar to decrease.
– For example, if the inflation rate is 4% annually, then theoretically a $1 pack of gum will cost $1.04 in a year.
Variations on inflation:
• Deflation is when the general level of prices is
falling.
• Hyperinflation is unusually rapid/extreme
inflation.
• In Germany in 1923, prices rose 2,500% in one
month!
Has this happened recently?
• Funny you should ask…• Venezuela
• Zimbabwe
The amount of Venezuelan Bolivars (worth $1.45) needed to buy 1kg of meat. https://www.bbc.com/news/business-45523636 photo credit: Reuters
What is the most popular movie of all time?With your neighbor, talk about what you think are some of the top money-making movies of all time.
Nominal Box Office Receipts:
www.boxofficemojo.com
IS THERE A PROBLEM WITH THESE NUMBERS?
From www.economicnoise.com
DOMESTIC GROSSESAdjusted for Ticket Price Inflation*
CHART NOTES
* Adjusted to the estimated 2018 average ticket price of $9.14. Inflation-adjustment is mostly done by multiplying estimated admissions by the latest average ticket price. Where admissions are unavailable, adjustment is based on the average ticket price for when each movie was released (taking in to account re-releases where applicable).
^ Indicates documented multiple theatrical releases. Most of the pre-1980 movies listed on this chart had multiple undocumented releases over the years. The year shown is the first year of release.
Most pre-1980 pictures achieved their totals through multiple releases, especially Disney animated features which made much of their totals in the past few decades belying their original release dates in terms of adjustment. For example, Snow White has made $118,328,683 of its unadjusted $184,925,486 total since 1983. Click here for a full discussion of adjusting for movie ticket price inflation.
Adjusting for ticket price inflation is not an exact science and should be used for a general idea of what a movie might have made if released in a different year, assuming it sold the same number of tickets.
3 Macroeconomic Goals?1. A growing economy -- measured by GDP2. ???3. Low unemployment -- measured by the unemployment rate
CPI Research and ActivityThe Consumer Price Index (CPI) is a monthly measurement
of U.S. prices for most household goods and services. Changes in the CPI over time show inflation (rising prices) or
deflation (falling prices.)
CHAPTER 24 MEASURING THE COST OF LIVING
The Consumer Price Index (CPI)
• The change in CPI from year to year is the
most common way to measure inflation.
– The basis of cost of living adjustments
(COLAs) in many contracts and in Social
Security.
How the CPI Is Calculated1. Fix the “basket.”
The Bureau of Labor Statistics (BLS) surveys consumers to determine what’s in the typical consumer’s “shopping basket.”
2. Find the prices.The BLS collects data on the prices of all the goods in the basket.
3. Compute the basket’s cost.Use the prices to calculate the total cost of the basket.
✓ Then, compare the CPI from one year to the next to determine inflation.
CHAPTER 24 MEASURING THE COST OF LIVING
How the CPI Is Calculated4. Choose a base year and compute the index.
The CPI in any year equals:
5. Compute the inflation rate.The percentage change in the CPI from the preceding period.
100 x cost of basket in current yearcost of basket in base year
CPI this year – CPI last yearCPI last year
inflationrate
x 100%=
WHAT IS THE CPI MARKET BASKET MADE OF?
What is Your Student Price Index?
Wish it Were Wednesday, February 26Warm up: Finish calculating CPI for your year and two years’ of inflation from our student price index activity.
Learning target: I can define CPI (Consumer Price Index) and use it to calculate inflation. I can define unemployment and explain how the unemployment rate is calculated.
USATP Unit 3 #1 due next Monday, March 2 by midnight
Laiba and Josh R: Take test after school today!
Agenda: Warm up review of standards (10 min); Work period: notes on unemployment; calculate the class unemployment rate (50 min); Closing: what questions do you have about unemployment?
CHAPTER 24 MEASURING THE COST OF LIVING
How the CPI Is Calculated4. Choose a base year and compute the index.
The CPI in any year equals:
5. Compute the inflation rate.The percentage change in the CPI from the preceding period.
100 x cost of basket in current yearcost of basket in base year
CPI this year – CPI last yearCPI last year
inflationrate
x 100%=
Comparing Student Market Baskets
QUICK GDP REVIEW
GDP PER CAPITA = REAL GDP ÷ POPULATION
• Is the best measurement of a country's standard of living (wealth, comfort, material goods, and necessities available).
• Shows how wealthy or well-off a country feels to its citizens
• It is NOT the average income of citizens
From NYTimes, Sept. 24, 2018:FACT CHECK OF THE DAY
Trump’s Inaccurate Claim That U.S. Is ‘the Fastest-Growing Economy in the World’The United States’ G.D.P. growth is nowhere near the highest in the world, though its rate is currently one of the highest among developed economies.
And the data says . . . .
Think Kindness Thursday, February 27Warm up: If it is not included in GDP, write N. If included, write I plus the letter of the category it would be counted under:
a. Yisell spends $100 on jewelry made in the US b. Eh Kaw spends $50 on foreign-made clothing c. Mr. Hardnett spends $40 on babysitting d. Chick-Fil-A spends $100,000 on chicken to make sandwiches e. US government spends $5 million on road signs f. Foreign consumers buy $10 million of US goods g. Elijah buys a fake Rolex on the black market for $50 h. Burger King invests $5,000 in new ice-cream making machine i. Kaleb buys an old rap CD by Run DMC from 1990 for $3 j. Alim buys $200 in stock in Home Depot
Think Kindness Thursday, February 27Warm up: Finish calculating CPI for your year and two years’ of inflation from our student price index activity.
Learning target: I can define unemployment and explain how the unemployment rate is calculated.
USATP Unit 3 #1 due next Monday, March 2 by midnight
Laiba: Take test after school today!
Agenda: Warm up review of standards (10 min); Work period: notes on unemployment; calculate the class unemployment rate (50 min); Closing: what questions do you have about unemployment?
THINK ABOUT UNEMPLOYMENT
1. Without looking at your phones to research this, what do you think the unemployment rate in the U.S. is today?
2. What about unemployment in Georgia? What are Georgia’s historic rates ?
3. How do you define unemployed?
The jobless rate
fell to 3.7%, the
lowest since
December 1969,
the Labor
Department said
Friday.
AUGUST 2018 Unemployment Data from geofred.stlouisfed.org
U6 Unemployment Rate
U3 is the official unemployment rate. U5 includes discouraged workers and all other marginally attached workers. U6 adds on those workers who are part-time purely for economic reasons. The current U6 unemployment rate as of September 2018 is 7.50.
What Exactly is the Labor Market?
Households Businesses/Firms
Supply of Labor
Demand for Labor
Demand for Goods& Services
Supply of Goods& Services
Product Market
Labor Market(Factor Market)
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Unemployment rate = The percent of people in the labor force who want a job but are not working.
What is Unemployment?
Unemploymentrate
# unemployed # in civilian labor force
x 100=
58
To qualify as unemployed you must be:1. jobless, 2. looking for a job, and 3. available for work
Labor Force = Unemployed + Employed*
*Employed includes:
• Part-time employees who want/need full-time job
• Underemployed: people who are in a job that is not what they trained for (e.g., an engineer who is a Starbucks barista)
WHO IS IN THE LABOR FORCE?
•Unpaid homemakers who aren’t looking for a job
• Retirees who aren’t looking for another job
• Active military
• Ppl under 15 years old
• Ppl in hospital or jail (“institutionalized”)
WHO IS NOT IN THE LABOR FORCE?
▶ When it is your turn, stand up and read your story
▶ With your neighbor, fill out a chart like this using tally marks for each person:
Not in the Labor Force Employed Unemployed
Activity: Measuring Class Unemployment Rate
▶ Using the formula for unemployment, calculate the class unemployment rate =
# unemployed x100
# in labor force
Activity: Measuring Class Unemployment Rate
LABOR FORCE OUT OF LABOR FORCE
Unemployed Not Unemployed
Who is unemployed? Sort the statements into the correct categories:
An adult looking for a job who was not paid for work last week.
An adult looking for a job who was not paid for work last week.
A 15 year old with no job who is looking for a job.
A 15 year old with no job who is looking for a job.
A 17-year-old high school student with no job who is looking for a job at a supermarket.
A 17-year-old high school student with no job who is looking for a job at a supermarket.
An engineer working at a fast food restaurant while looking for a job in her career field.
An engineer working at a fast food restaurant while looking for a job in her career field.
A 16-year-old who was paid for yard work last week and is looking for a job in retail.
A 16-year-old who was paid for yard work last week and is looking for a job in retail.
An adult who has no job and has given up looking for a job.
An adult who has no job and has given up looking for a job.
The country of Altimina has a population of 150,000. According to the latest data, there are 20,000 people under the age of 16, and 30,000 people who are over the age of 16, but not looking for work. Currently, there are 5,000 people who are 16 or older and actively looking for work. The president of Altimina has asked you what the size of the labor force is, what the number of unemployed is and what the unemployment rate for Altimina is.
Freshmen Friday, October 18Warm up: From your brains not your notes--add to your index card for unemployment the definition of civilian labor force.
Learning targets: I can explain the four different types of unemployment.
Unit 3a test next Thursday!
Homework: (1) USA Test Prep 3-1 due TONIGHT, October 18 by midnight;
(2) EverFi module 1 due next Friday, October 25 by midnight.
Calculate the unemployment rate . . .
► Calculate the unemployment rate for the country of Brownlapistan that has 100 citizens:
► 12 of them are children► 7 are prisoners► 21 are stay-at-home parents► 10 of them are homeless but not looking for jobs ► 25 are working various part-time jobs► 10 are working full-time► 10 are out of work, but are looking for work ► 5 are out of work but stopped looking for a job
Think Empathy Friday, February 28Warm up: Use your notes and your unit 3 overview sheet to quiz your neighbor to prepare for the quiz (we will take quiz before lunch!).
Learning targets: I can explain the four different types of unemployment.
Unit 3a test next week!
USATP Unit 3 #1 due this coming Monday, March 2 by midnight
Agenda: Warm up: review for quiz (10 min); Work period: quiz; notes on types of unemployment; calculate the class unemployment rate (50 min); Closing: what questions do you have about unemployment?
And why does Ms. Browngive us so many darn quizzes?
4 Types of Unemployment
#1. Seasonal Unemployment•A type of frictional unemployment that occurs when the demand for work decreases because of the time of year. Examples:
○ lifeguards in winter or Santas Jan-Oct.
71
#2. Structural Unemployment•Changes in the structure of the economy make some jobs/skills obsolete.
•Workers will have to be retrained for a new job.
Examples: •VCR repairmen•Auto assemblers fired as robots take over production•U.S. company “outsources” jobs to a foreign country
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#3. Cyclical Unemployment•Unemployment that results from economic downturns (recessions).
•As demand for goods and services falls, demand for labor falls and workers are fired.
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Examples: •Steel workers laid off during recessions.
•Restaurant owners fire waiters after months of poor sales due to recession.
#4. Frictional Unemployment•“Temporarily unemployed” or between jobs. But in
the real world, even if the number of job seekers is equal to the number of job vacancies, it takes time to find out about new jobs, to interview and figure out if the new job is a good match, or perhaps to sell a house and buy another in proximity to a new job. The unemployment that occurs in the meantime, as workers move between jobs, is called frictional unemployment. Frictional unemployment is not inherently a bad thing. It takes time on part of both the employer and the individual to match those looking for employment with the correct job openings. For individuals and companies to be successful and productive, you want people to find the job for which they are best suited, not just the first job offered.
Examples: ○ High school or college graduates looking for jobs.○ Individuals who were fired or quit and are looking for a
better job.
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REVIEW ACTIVITYName That Concept (7:09)
Rules: 1. Cannot use the word(s)2. Focus on the concept not word
Ex: Demand; opportunity cost75Copyright
ACDC Leadership 2018
Round 1
Copyright ACDC Leadership 2018
1. GDP2. Inflation3. What a chicken might say4.Finished Goods & Services5.C+I+G+X-M
Round 2
Copyright ACDC Leadership 2018
1. CPI2. Product Market3. Unemployment rate4. Dab5. GDP per Capita
Practice unemployment
Complete nine modules for quiz and HW grades.
