NC Civics and Economics: Goal 9

1. GOAL 9 NC Civics and Economics

2. Gross Domestic Product and The Business Cycle

3. Gross Domestic Product(GDP) A measurement of all that is produced within a country in one year.

4. Per Capita GDP GDP divided by a countries population In other words: The GDP per person

5. The Business Cycle Expansion Peak Contraction Trough

6. Peak (a.k.a. “Boom”) Economy is at its HIGHEST Unemployment at its LOWEST

7. Contraction (a.k.a. “Recession”) Economy is DECLINING Unemployment is RISING

8. Trough (a.k.a. “Depression”) Economy is at its LOWEST Unemployment is at its HIGHEST

9. Expansion Economy is IMPROVING Unemployment is FALLING

10. CPI Stands for Consumer Price Index Measures inflation rates for the nation’s economy Inflation – the general rise in the price of an item over time.

11. Government Economic Regulations

12. Social Security Act of 1935 (SSA) WHAT IT DID Established unemployment, retirement and disability insurance IMPACT ON US ECONOMY Gave citizens a sense of security if they were to have hard times (secure with your money =spending money=better economy)

13. National Labor Relations Act, 1935 WHAT IT DID Created the National Labor Relations Board (NLRB) Workers have the right to join unions and use collective bargaining IMPACT ON THE US ECONOMY Gave protection and power to the workers

14. Fair Labor Act, 1938 WHAT IT DID Est. the 1st minimum wage of 25 cents per hour and time and a half for working over 40 hours per week IMPACT ON THE US ECONOMY Workers must be treated fairly and paid accordingly

15. Taft Hartley Act, 1947 WHAT IT DID Put restrictions on labor unions Employee doesn’t have to be a member of the union to be hired IMPACT ON THE US ECONOMY Unions cannot be all powerful President can delay a union strike for 80 days if it will threaten “national health or safety”

16. How might government deregulation affect the US Economy? Allows firms to compete in free-markets Removes gov’t restrictions like entry barriers and price controls

17. United States and International Trade

18. NAFTA North American Free Trade Agreement goal to eliminate all tariffs and trade barriers between Canada, the United States, and Mexico by 2009.

19. Interdependence Countries are dependent on one another in order to focus on what they have an advantage in producing.

20. Barriers to Free Trade Tariffs Quotas Embargoes

21. Tariffs Taxes placed on imported goods increase the price and cost of shipping items

22. Quotas Limits placed on items Ex. Import Quota – a limit on the amount of a good that can be imported The U.S.A. can only import… 908, 764 kilograms of raw cotton from India and Pakistan. 621,780 kilograms of raw cotton from China 355,532 kilograms of raw cotton from Egypt and Sudan

23. Embargoes political tools used to economically hurt another country by not trading with them Ex: CUBA U.S. Trade Embargo against Cuba. It is illegal to trade with companies in Cuba, we disagree with the communist ruler Fidel Castro and his government. We are hurting Cuba economically by not trading and raising the living standards of the country.

24. Question? How does the table on p.3 of your qualifier illustrate the United States unfavorable balance of trade? The US’s imports are greater than its exports. The balance is negative so the balance of trade is unfavorable.

25. Taxes

26. Regressive Tax Purpose: As income increases, the percentage of taxes paid decreases Hurts the poor Example: Sales Tax

27. Progressive Tax Purpose: As income increases the percentage of taxes paid increases Hurts the rich Examples: Income Tax

28. Excise Tax Purpose: A tax on the sale or production of luxury or harmful goods Examples: Tax on cigarettes, alcohol, gasoline

29. Interest Rate A percentage that is charged or paid for borrowing money Higher interest rate=less spending/borrowing

30. Fiscal & Monetary Policy

31. What is the purpose of Fiscal and Monetary Polices? To ensure economic expansions and contractions are not to severe NOT

32. Fiscal Policy The use of government (Congress) spending and revenue collection to influence the economy.

33. MONETARY POLICY The actions taken by the Federal Reserve to influence the stability of the economy

34. Economic Problem: Inflation Occurs when the market is flooded with too much money in the hands of consumers So… the Goal is to DECREASE the amount of $ in the hands of consumers

35. Fiscal Policy(Congress) (Increase) Taxes (Decrease) Gov’t Spending (Decrease) Welfare payments TIGHT Fiscal Policy

36. Monetary Policy(Federal Reserve) (Increase) Interest (Discount) Rates (Increase) Reserve Ratio Sell Bonds TIGHT Monetary Policy

37. Economic Problem: Unemployment Occurs when the market slows down due to a lack of consumer spending. So… the Goal is to INCREASE the amount of $ in the hands of consumers

38. Fiscal Policy(Congress) (Decrease) Taxes (Increase) Gov’t Spending (Increase) Welfare payments LOOSE Fiscal Policy

39. Monetary Policy(Federal Reserve) (Decrease) Interest (Discount) Rates (Decrease) Reserve Ratio Buy Bonds LOOSE Monetary Policy

40. REQUIRED RESERVE RATIO Money the banks have to keep “RESERVE” at the bank.

41. DISCOUNT RATIO The interest rate the federal reserve charges banks to borrow money. FYI – this is one that the name does not match what it is but you just have to remember

42. BONDS Sold by the federal reserve and increases in value over time

43. FEDERAL RESERVE The bank owned by the Federal government. Does not work with the public only with other banks.

44. United States and International Trade

45. NAFTA North American Free Trade Agreement NAFTA impacts the United States because its goal is to eliminate all tariffs and trade barriers between Canada, the United States, and Mexico by 2009.

46. Interdependence When countries rely on each other for certain goods.

47. Barriers to Free Trade Tariffs Quotas Embargoes

48. Tariffs Taxes placed on imported goods These increase the price and cost of shipping items to consumers in other countries Ex. Customs Duty - a tax placed on certain items purchased in other countries

49. Quotas Limits placed on items Ex. Import Quota – a limit on the amount of a good that can be imported The U.S.A. can only import… 908, 764 kilograms of raw cotton from India and Pakistan. 621,780 kilograms of raw cotton from China 355,532 kilograms of raw cotton from Egypt and Sudan

50. Embargoes Are political tools used to economically hurt another country by not trading with them. U.S. Trade Embargo against Cuba. It is illegal to trade with companies in Cuba, we disagree with the communist ruler Fidel Castro and his government. We are hurting Cuba economically by not trading and raising the living standards of the country.

51. Balance of Trade The monetary difference between the exports and imports of merchandise. Charts demonstrate a countries unfavorable balance of trade by showing the countries exports are less than their imports