Economic Indicators

1
Economic Indicators

• How is the economy doing?

2
Three Types of Economies

• Command Government decides what to produce and
  the price. Ex. Soviet Union
• Free Market Government has no role in economy,
  laissez-faire
• Mixed Economy government has limited regulation
  of economy ex. United States

3
Changing U.S. Economy

• Manufacturing Sector
• Declining today.
• Until 1950s economy based on making
  products, steel, etc.
• Service Sector
• Growing todaybanking, computer services,
  entertainment, retail sales

4
Economic Indicators

• Answer the question
• How is the economy doing?

5
Gross National Product

• Dollar value of the goods and services produced
  in one year.
• What was the GNP for 2004?

6
Goods and Services

• Goods
• Items that are manufactured
• Ex. Cars, clothing, computers

• Services
• Labor that is paid for
• Ex. cashier, doctor, bank teller, teacher

7
Housing Starts

• The number of new houses under construction.
• Why is housing starts a good economic indicator?

8
Retail Sales

• Amount of money spent in stores

9
Unemployment Rate

• Percentage of people who are out of work and
  looking for a job.
• What unemployment rate does the Fed consider to
  be full employment?
• What is Vermonts unemployment rate?

10
Inflation

• The tendency for prices to rise over time.
• Why is inflation a sign of a strong economy?

11
Consumer Price Index

• CPI is the Feds measure of inflation
• Percent increase or decrease in prices

12
Productivity

• Measures the work done per hour.
• What does high productivity indicate?

13
Interest Rates

• The price you pay for borrowing money.
• Measured in percent.
• What does it mean if interest rates are going up?

14
Stock Market

• Dow Jones Industrial Average (DJIA)
• NASDAQ
• Why is a rising stock market a sign of a strong
  economy?

15
Strength of the Dollar

• Is the dollar rising or falling compared to the
• Euro
• Yuan
• Yen