1. Introduction to Business © Thomson South-Western ChapterChapter Economic Activity 2-1 2-1Measuring Economic Activity 2-2 2-2Economic Conditions Change 2-3 2-3Other Measures of Business Activity 2

2. Introduction to Business © Thomson South-Western Chapter 2 Slide 2 LESSON 2-1 LESSON 2-1 Measuring Economic Activity Goals Define gross domestic product. Describe economic measures of labor. Identify economic indicators for consumer spending.

3. Introduction to Business © Thomson South-Western Chapter 2 Slide 3 Key Terms Gross Domestic Product (GDP) GDP per capita unemployment rate productivity personal income retail sales

4. Introduction to Business © Thomson South-Western Chapter 2 Slide 4 GROSS DOMESTIC PRODUCT (GDP) Components of GDP Comparing GDP

5. Introduction to Business © Thomson South-Western Chapter 2 Slide 5 Comparison of GDP in Selected Countries

6. Introduction to Business © Thomson South-Western Chapter 2 Slide 6 >> C H E C K P O I N T What types of economic activities are not included in GDP?

7. Introduction to Business © Thomson South-Western Chapter 2 Slide 7 LABOR ACTIVITIES Employment Productivity

8. Introduction to Business © Thomson South-Western Chapter 2 Slide 8 >> C H E C K P O I N T What are ways to increase productivity?

9. Introduction to Business © Thomson South-Western Chapter 2 Slide 9 CONSUMER SPENDING Personal income Retail sales

10. Introduction to Business © Thomson South-Western Chapter 2 Slide 10 >> C H E C K P O I N T What are the main sources of personal income?

11. Introduction to Business © Thomson South-Western Chapter 2 Slide 11 LESSON 2-2 LESSON 2-2 Economic Conditions Change Goals Describe the four phases of the business cycle. Explain causes of inflation and deflation. Identify the importance of interest rates.

12. Introduction to Business © Thomson South-Western Chapter 2 Slide 12 Key Terms business cycle prosperity recession depression recovery inflation price index deflation

13. Introduction to Business © Thomson South-Western Chapter 2 Slide 13 THE BUSINESS CYCLE Prosperity Recession Depression Recovery

14. Introduction to Business © Thomson South-Western Chapter 2 Slide 14 >> C H E C K P O I N T What are the four phases of the business cycle?

15. Introduction to Business © Thomson South-Western Chapter 2 Slide 15 CONSUMER PRICES Inflation Causes of inflation Measuring inflation Deflation

16. Introduction to Business © Thomson South-Western Chapter 2 Slide 16 >> C H E C K P O I N T What are the main causes of inflation?

17. Introduction to Business © Thomson South-Western Chapter 2 Slide 17 INTEREST RATES Types of interest rates Changing interest rates

18. Introduction to Business © Thomson South-Western Chapter 2 Slide 18 >> C H E C K P O I N T How do interest rates affect business activities in our economy?

19. Introduction to Business © Thomson South-Western Chapter 2 Slide 19 LESSON 2-3 LESSON 2-3 Other Measures of Business Activity Goals Discuss investment activities that promote economic growth. Explain borrowing activities by government, business, and consumers. Describe future concerns of economic growth.

20. Introduction to Business © Thomson South-Western Chapter 2 Slide 20 Key Terms capital project stock bond budget surplus budget deficit national debt

21. Introduction to Business © Thomson South-Western Chapter 2 Slide 21 INVESTMENT ACTIVITIES Personal savings The stock market The bond market

22. Introduction to Business © Thomson South-Western Chapter 2 Slide 22 >> C H E C K P O I N T Name some examples of capital projects.

23. Introduction to Business © Thomson South-Western Chapter 2 Slide 23 BORROWING Government debt Business debt Consumer debt

24. Introduction to Business © Thomson South-Western Chapter 2 Slide 24 >> C H E C K P O I N T What is the cause of a budget deficit?

25. Introduction to Business © Thomson South-Western Chapter 2 Slide 25 FUTURE ECONOMIC CHALLENGES Limited access to health care Need for proper housing for many people Traffic and crime Unemployment

26. Introduction to Business © Thomson South-Western Chapter 2 Slide 26 >> C H E C K P O I N T What are future economic concerns for a country’s economy?