Great

1. 1
The American Economy:
Boom or Bust
By: Dean Berry, Ed. D.
Georgia Berry, M.A.

2. Free PowerPoint Version at
Slideshare.com
Type PPT title or dean r
berry
2

3. Where does money come from?
We sometimes
wish it would grow
on trees or come
from the goose
that laid the golden
egg.
3

4. Money comes from
consumer spending.
The amount of money in
circulation can vary
greatly. If consumers
spend more and save
less, the amount of
money in circulation
increases and business
activity and jobs
increase.
4

5. When people buy, sellers make money. When sellers
make money, they need to hire more workers. As
workers earn more money, they have more to spend
on goods and services.
5

6. On the other hand, if
consumers pull back
and decrease their
spending, then business
activity and jobs
decrease. If this
continues for too long,
our economy may enter
a serious recession.
6

7. Class Discussion
How does consumer
spending help our economy?
7

8. 8

9. As consumers spend money and manufacturers
sell products, more workers are needed to make
additional products to sell. The money cycle
becomes a circular process.
9

10. Businesses hire workers when
consumer demand and spending
increases.
10

11. The number of people gainfully
employed varies from year to year
based on the health of the economy.
11

12. 12
What role does the
government have in
the economy?
Let’ take a look…

13. 13
Cash Flow
Workers make
products & services
and get paid $
Companies sell
products & services Buyers purchase
products & services $
Government
collects taxes $
Government provides
schools, roads, police,
fire dept., etc.

14. Class Discussion
Why does the federal government collect
taxes?
Which programs and services are
provided by the federal and funded with
tax dollars?
14

15. As the government collects taxes, government
services such as fire departments, schools, roads,
and bridges are made available to the public.
15

16. How does the federal government get its money for
programs and services? Almost half of taxes come
from individuals. Which tax group paid much less
in 2010 than in 1950? Which group paid a lot
more in taxes in 2010 than in 1950?
16

17. What do our federal taxes pay for? The
largest chunks of money are for defense,
health, and interest on the debt.
17

18. Government services and programs inject tax
money back into the economy. When money is
spent on parks, police, education, disease control,
health programs, medicare, and the military, more
people have jobs and businesses receive
government contracts to provide public services.
As a result, money collected as taxes is recycled
back into the economy.
18

19. Can the government help the
economy recover and increase
job opportunities?
The federal government has
a variety of tools at its
disposal to help influence a
poor economy or an over
stimulated economy. 19

20. Class Discussion
What can the government do
to help a slow economy?
20

21. 21
How the Federal Government
Influences the Economy
May pump billions of
dollars into the
economy with
government spending
May urge the
Federal Reserve to
lower the prime
interest rate
May boost
unemployment benefits
for the jobless
May make trade deals
with other countries to
boost exports

22. How are major interest rates set
for U.S. banks?
The Central Bank of the United States, the Federal
Reserve System, exercises several important
functions that can speed up the economy or slow it
down if necessary. Controlling borrowing rates is
one of their key powers.
22

23. The United States banking system depends on the
monetary policies established by the Federal Reserve
System. The Federal Reserve Board of Governors and
their chairperson set interest rates for borrowing by major
banks. Those rates can speed up the economy if they are
lowered or slow down the economy if they are increased.
23

24. During an economic recession, the government can
stimulate the economy by spending extra money on job
training programs, highway and bridge projects, hiring more
police and teachers, and expanding military expenditures
or cutting taxes.
24

25. 25

26. When the government spends money or reduces taxes, more
money flows into the economy and consumers have more
money to purchase products and services. Consumer demand
causes businesses to need more employees. As a result, more
people are hired, wages increase, spending goes up, and more
taxes are collected for government services.
26

27. Why do governments collect taxes? Governments at
all levels need revenue to carry out many important
functions and provide services that people expect.
27

28. 28
Class Discussion
What kind of taxes
do states collect?

29. 29
State Revenue
State
Taxes
Collected
Gas
Tax
Sales
Tax
Auto
Registration
Fees
Unemployment
Tax
State
Income
Tax

30. 30
Taxes that must be paid
State sales tax varies from state to
state ( up to 9%)
Social Security & Disability tax 7.75%
Property tax & Registration fees
Income Tax-State (most states)and
Federal tax

31. Class Discussion
Why do states collect
taxes?
Where does the tax
money go?
31

32. 32

33. Do we always have a good
economy?
Unfortunately, the economy fluctuates
between periods of rapid expansion and
very slow growth. This business cycle of
“ups and downs” in the health of the
economy has been a regular occurrence for
the last 100 years.
33

34. Like a car speeding downhill, at some point, the brakes need to
be applied or the high speed will result in a crash. In 1929, the
stock market crashed and the economy was a wreck for over
eight years. In 2008, the economy veered off the road as big
banks made bad loans and could not collect on them.
Government regulators, if they are not asleep at the wheel, can
issue citations to corporations who illegally exceed the
economic speed limit.
,
34

35. Class Discussion
1. What is inflation?
2. How are people affected by inflation?
35

36. The American economy historically has gone
through business cycles that include periods
of prosperity and recession. During prosperity
there can be over stimulation of the economy
which results in rapid price increases. These
increases are referred to as price inflation.
36

37. Sometimes the American economy becomes so over
stimulated that prices increase much faster than wages.
When consumers borrow too much and interest rates go
sky high, consumers must cut back on spending. If the
decrease in spending continues for several months,
businesses are forced to lay off workers and reduce
investments and business expansion. This downward spiral
can get worse month by month and create a very serious
recession with many people losing their jobs.
37

38. Let’s take a closer look at price
inflation.
How is the average person
affected by inflation in our
economy?
38

39. Compare the prices in 1980 with the prices
in the year 2000. How much did the average
house go up in price after 20 years?
39

40. As the price of staples such as milk, sugar, and
eggs rise, all packaged foods that contain these
ingredients increase rapidly in price. The average
person’s grocery bill goes up considerably. This
can be a budget buster for many families.
40

41. With inflation our purchasing power shrinks since
our dollars buy less than before inflation. It takes
a lot more money to buy the same products when
inflation pushes prices much higher.
41

42. Just as our economic business cycle fluctuates from strong
to weak, inflation of prices can reach dangerous levels and
cause the “economic bubble to burst”. In the “Great
Recession of 2008, the housing bubble burst and caused
the collapse of many banks and lenders that made bad
loans on homes that were suddenly worth far less than the
money owed on them. Home owners were “under water” on
their mortgages and banks were “up a creek” financially.
42

43. When the economic bubble bursts, consumers lose
confidence and spend less, businesses stop investing in
the future, and banks stop lending money to many
borrowers. During 2008, the first to burst was the housing
bubble. Home prices rose so fast and to such a high level
that buyers were no longer willing to pay ridiculous prices
for homes. As buyers backed off, prices plummeted, and
home owners lost as much as half the value of their homes.
43

44. Class Discussion
What does foreclosure mean?
Why do foreclosures increase dramatically
during some periods of history?
44

45. As homes lost their value and the economy slowed, owning
a home became a negative for many struggling home
owners. With a slowing economy, jobs were cut and
families could not pay their mortgages. Banks foreclosed
on home loans that were behind in payments. Many bank
owned homes sat unoccupied for several years further
lowering property values.
45

46. The collapse of major banks, and huge losses on the stock
market in 2008 and 2009, led the Federal government to
provide huge financial support to large banks and
corporations such as General Motors and Chrysler
Corporation to keep them from going bankrupt and further
damaging the overall economy. This decision was
controversial but did save many jobs and additional
economic pain.
46

47. Class Discussion
Do you think the federal government
should have given huge loans to prop up
the major banks and automobile
corporations?
What might have happened if the
government had not “bailed out the big
banks and General Motors”?
47

48. The recession of 2008 resulted in
millions of Americans losing their jobs
through no fault of their own.
48

49. Class Discussion
Do you know anyone who has lost a job
and experienced unemployment for more
than a few weeks?
In America everyone is guaranteed the
right to an education. Is everyone
guaranteed the right to a job? Should they
be?
49

50. By February, 2009, the unemployment rate was
8.1 percent nationally, a twenty five year high.
Over 12 million people could not find a job. The
federal government agreed to extend
unemployment benefits for an additional 26 weeks.
50

51. In an effort to stimulate the economy and create
more jobs, the federal government injected billions
of dollars into the economy with programs to fund
education, unemployment insurance, highways,
and bank losses.
51

52. Eighty years before the Great Recession of 2008, the United
States experienced the worst economic collapse in history,
the Great Depression. In 1929, the stock market crashed and
speculators lost fortunes within a few days. An over heated
economy with very little oversight by government regulators
resulted in a collapse of the financial system and the closing
of thousands of banks. Since bank deposits were not insured
as they are today, average Americans lost everything they
had in bank accounts.
52

53. The role of the government in 2008 was far more
active than in the early years of the Great
Depression in the 1930’s. The unemployed had no
unemployment insurance or food stamps to help
them during tough times in the Great Depression.
Standing in line at soup kitchens was the only way
to avoid starvation.
53

54. Unemployment was so bad during the
Great Depression that over 25% of adult
workers were unemployed. There was no
safety net for the unfortunate.
54

55. Class Discussion
When people are out of work today, what
kind of safety net is available for families
with income below the poverty level?
How are the elderly protected financially?
55

56. In 2008, the Great Recession inflicted serious pain
on many Americans. The blow to the economy
lasted several years. Low home prices and high
unemployment kept the economy in the doldrums
from 2008 until 2012, when the economy began
adding jobs. During 2013, the economy began
adding over 100,000 jobs per month and the
unemployment rate began inching downward. The
Great Recession was over, but some dangers to
the economy still existed. The national debt was
very high and many people were still unemployed.
56

57. 57
Check-up and Review
Raise your green card if you believe
the statement is true or your red
card if you think it is false.

58. 58
True or False-1
If the federal government
wants to stimulate a slow
economy, it can boost
unemployment benefits for
the jobless, lower taxes, and
increase government
spending.

59. 59
True-1

60. 60
True or False-2
All taxes that
workers pay are
collected by the
federal government.

61. 61
False-2

62. 62
True or False-3
In most states, state
taxes help provide
services such as
schools, colleges,
parks, highways, and
state police.

63. 63
True-3

64. 64
True or False-4
More jobs are created
when most consumers
increase savings and
pay off their debts.

65. 65
False-4

66. 66
True or False-5
When retail stores
increase their sales,
more workers are
hired.

67. 67
True-5

68. 68
True or False-6
When more buyers
purchase products and
services, the government
collects more taxes and
can provide more
services for the public.

69. 69
True-6

70. 70
True or False-7
More money is
created when
consumers spend
their money freely.

71. 71
True-7

72. 72
True or False-8
Social Security tax is
approximately 40% of
the average workers
gross earnings.

73. False-8
73

74. True or False-9
The Great Recession of 2008 was worse
than the Great depression because the
government refused to financially bailout
the banks.
74

75. False-9
75

76. True or False-10
Inflation usually occurs during
a recession when people
have less money.
76

77. False-10
77

78. The Great Recession of 2008
1 min Animated Excellent
https://www.youtube.com/watch?v=nBh6Pl
C9_1g
78

79. The Rise of Machines:
Automation and Job Loss
11 min In a Nutshell
https://www.youtube.com/watch?v=WSKi8
HfcxEk
79

80. Brainstorm and Discuss
Most Americans in the future will change
jobs more than eight times in their life
time. Brainstorm a list of jobs you would
consider. Generate at least 25 career
possibilities.
Which of these careers might be the least
secure during an economic recession?
80

81. Report Back to Class
• Share your group’s careers.
• Which ones would be the least secure
during a recession? Why?
• Which careers might be more secure?
81

82. Conduct Research on the Issues
 Use technology and text sources
to gather information about the causes of
economic recessions in the United
States. Examine the roles of business
and the federal government in generating
prosperity and employment. Explore
various solutions to improving the
economy during a recession. Be
prepared to write a proposal explaining
the best ways to end an economic
recession.
 This will be a short research assignment
and should generate two or three pages
of notes. The notes will used during the
next class discussion to review ideas and
solutions and to write a proposal.
82

83. Essential Questions to
Guide Research
Can reducing taxes on businesses improve the
economy?
What causes consumers to reduce their spending?
Why do employers hire more employees? Why do
they lay off employees?
What can the government do to get consumers to
increase spending?
How can the Federal Reserve stimulate economic
activity?
Can increasing government spending during a
recession improve employment rates?

84. Write a Proposal
Use your notes to write
a one or two page
proposal to recommend
the best ways to end an
economic recession.
Provide specific
information to support
your proposed ideas
with clearly articulated
arguments and
sufficient evidence.
84

85. Your Proposal
Define the issue/problem
Outline the details of
your argument
Cite supporting research
Project possible
roadblocks
Specify contingency or
back up plans
85

86. The following slides provide
sources for the research project.

87. The Federal Government and
the Economy Hyperlink
http://nationalpriorities.org/budget-
basics/federal-budget-
101/?redirected=true&gclid=COvWmvL01
bsCFc9sfgodnR8Atg
87

88. Why Government Stimulous
Does Not Work Hyperlink
http://www.heritage.org/research/reports/2
008/11/why-government-spending-does-
not-stimulate-economic-growth
88

89. Stimulating the Economy
Hyperlink
http://www.moneycrashers.com/best-
ways-to-stimulate-the-united-states-
economy-and-create-jobs/
89

90. Recessions and the
Government and Business
Sectors
http://www.slideshare.net/uakharia/Whatisr
ecession123605737159phpapp01
90

91. How to Avoid a Recession
http://www.economicshelp.org/blog/236/re
cession/how-to-avoid-a-recession/
91

92. Supply Side Economics and
Recessions
http://www.investopedia.com/articles/05/01
1805.asp
92

93. What Businesses Can Do in a
Recession
http://businesscasestudies.co.uk/cima/deci
sion-making-across-the-business-
cycle/downturn-and-
recession.html#axzz2xULdA1t1
93

94. Government Action During a
Recession
http://thesource.hubpages.com/hub/Gover
nment-spending-and-taxes-during-
recession
94

95. How to End an Economic
Recession
http://www.rollingstone.com/politics/blogs/
national-affairs/paul-krugman-on-how-to-
fix-the-economy-and-why-its-easier-than-
you-think-20120502
95

96. Budget Cuts Can hurt the
Economy
http://www.cnbc.com/id/100431628
96

97. Develop a Writing Plan
Determine what your
main point will be,
and write a topic
sentence that
provides focus for
your essay.
Choose several
main ideas that
support your topic
sentence.
Sort your information
into supporting
details with facts and
examples. 97

98. Use the five
paragraph
essay to
write your
paper.
98

99. Details Must Support the Main
Ideas
Provide specific
facts, examples,
and reasons for
each main idea
in the body of
your essay

100. Prepare to Write
Use your outline
and write a five
paragraph essay
on your topic.
As you write your
rough draft, it will
be very important
to use special
words that enable
you to transition
smoothly from one
idea to the next.
100

101. Transition Words
As you view these
words, select the
words that help you
make transitions
smoothly from one
idea to the next.
as a result
such as
for example
nevertheless
for that reason
finally
at this time
therefore
furthermore
in addition
in conclusion
as well as
101

102. Review, Edit, and Rewrite
1. Re-read your essay several
times.
2. How can you improve your
sentences to communicate more
clearly?
3. Are your main ideas supported
by examples and details?
4. Exchange papers with another
student and read each other’s
essay out loud.
5. Make final corrections and write
the final draft of your polished
essay. 102

103. Explore the Issue
Compare and contrast the
Great Depression and the
Great Recession of
2008.How were they similar,
and how were they
different? Examine the role
of the government and the
effects of the poor economy
on individuals during both
economic downturns.
103

104. Compare and Contrast
In order to compare
events, it is necessary
to examine the
historical facts and to
evaluate the different
opinions of experts.
The first step is to ask
relevant questions
that will guide your
investigation of the
evidence.
104

105. Inquiring Minds want to Know
Essential Questions
What were the primary causes of the Great
Depression?
What were the causes of the Great Recession of 2008?
What actions did the federal government take during the
Great Depression?
What actions did the federal government take during the
Great Recession of 2008?
How were average people affected during the Great
Depression?
How were average people affected during the Great
Recession of 2008?
105

106. Conduct the Research
Identify specific questions
about the issue to guide
your investigation of the
facts.
Determine if the evidence
is credible and supports
your main arguments.
Use internet and book
sources to gather credible
information.
106

107. The Proof is in the
Pudding
The Issue: Compare and
contrast the Great
Depression and the Great
Recession of 2008.
Your assignment is to
research this issue, take
a position, support your
arguments with sufficient
evidence, and write a
report to convince others
of your point of view.
107

108. The following slides
provide sources for the
research project.

109. The Great Depression Hyperlink
http://www.pbs.org/wgbh/americanexperie
nce/features/general-article/dustbowl-
great-depression/
109

110. About the Great Depression
Hyperlink
http://history1900s.about.com/od/1930s/p/
greatdepression.htm
110

111. Economics Library Great
Depression Hyperlink
http://www.econlib.org/library/Enc/GreatDe
pression.html
111

112. History of the Great Depression
Hyperlink
http://www.history.com/topics/great-
depression
112

113. Comparing the Recession of
2008 to the Great depression
http://www.forbes.com/sites/quora/2011/11
/08/how-does-the-current-economic-
recession-compare-to-the-great-
depression/
113

114. More Comparisons of
Recession of 2008 and the
Great Depression
http://en.wikipedia.org/wiki/Comparisons_b
etween_the_Great_Recession_and_the_G
reat_Depression
114

115. Great Recession
Unemployment Rate Falls
Hyperlink
http://www.huffingtonpost.com/katie-
bardaro/unemployment-
rate_b_1948186.html
115

116. Stimulating the Economy
Hyperlink
http://www.moneycrashers.com/best-
ways-to-stimulate-the-united-states-
economy-and-create-jobs/
116

117. Great Recession
Unemployment Hyperlink
http://money.cnn.com/2009/03/06/news/ec
onomy/jobs_february/
117

118. Develop a Writing Plan
Determine what your
main point will be, and
write a topic sentence
that provides focus for
your essay.
Choose several main
ideas that support your
topic sentence.
Sort your information
into supporting details
with facts and
examples.
118

119. Use the five
paragraph
essay
format to
write your
paper.
119

120. Details Must Support the Main Ideas
Provide
specific facts,
examples, and
reasons for
each main
idea in the
body of your
essay

121. Prepare to Write
Use your outline and
write a five paragraph
essay on your topic.
As you write your
rough draft, it will be
very important to use
special words that
enable you to
transition smoothly
from one idea to the
next.
121

122. Transition Words
As you view these
words, select the
words that help you
make transitions
smoothly from one
idea to the next.
as a result
such as
for example
nevertheless
for that reason
finally
at this time
therefore
furthermore
in addition
in conclusion
as well as
122

123. Relevance to the Real World
The final conclusion of your paper should
explain why your point of view on the issue is
important for the future. Answer these questions
as you write your conclusion.
1. Why is your issue important to our world?
2. Why should anyone care about it?
3. What would be the negative results if your
recommendations are not followed?

124. Review, Edit, and Rewrite
1. Re-read your essay several times.
2. How can you improve your sentences to
communicate more clearly?
3. Are your main ideas supported by examples
and details?
4. Exchange papers with another student and
read each other’s essay out loud.
5. Make final corrections and write the final
draft of your polished essay.
124

125. Group
Presentations
Meet in groups and present your paper.
Analyze, Evaluate
and Defend

126. Conducting Your
Research
Explore the different issues regarding
increasing employment opportunities
for all Americans. Since everyone
benefits when all adult workers can find
jobs, research all the different ways
that jobs can be increased in the
American economy. Write a report that
proposes how the U.S. can achieve full
employment.

127. Select Your Topic
Discuss your
topic with
your teacher
before
beginning
your
research. 127

128. Essential Questions to Guide Research
1. Why do companies hire new workers or lay off
workers?
2. How does increasing educational
opportunities for more Americans result in a
lower unemployment rate?
3. What can the government do to stimulate job
growth in our economy?
How does low cost education create a level
playing field for all Americans?
5. How does tax policy affect job creation in our
economy?
128

129. The following slides provide
sources for the research project

130. Higher Education and Job
Growth
http://www.luminafoundation.org/state_wor
k/how_college_attainment_aids_job_growt
h/
130

131. Education Creates Jobs
http://investinginkids.net/2012/06/14/why-
education-is-important-to-the-economy-
especially-the-local-economy-and-how-
business-can-help-improve-education/
131

132. Well Trained Workers Make
More and Spend More Thus
Creating More Jobs
http://www.hamiltonproject.org/papers/wha
t_is_happening_to_americas_less-
skilled_workers_the_importance_of_e/
132

133. The Federal Government and
the Economy Hyperlink
http://nationalpriorities.org/budget-
basics/federal-budget-
101/?redirected=true&gclid=COvWmvL01
bsCFc9sfgodnR8Atg
133

134. Definition of Full Employment
Hyperlink
http://en.wikipedia.org/wiki/Full_employme
nt
134

135. Short Definition of Full
Employment Hyperlink
http://www.investopedia.com/terms/f/fullem
ployment.asp
135

136. How to Achieve Close to Full
Employment hyperlink
http://www.peri.umass.edu/fileadmin/pdf/w
orking_papers/working_papers_101-
150/WP141.pdf
136

137. Paper on Full Employment
Hyperlink
http://www.levyinstitute.org/pubs/wp_560.p
df
137

138. Full Employment Not Yet
Acheived
http://www.levyinstitute.org/pubs/hili53a.pd
f
138

139. New York Times Full
Employment Hyperlink
http://www.nytimes.com/2006/02/12/busin
ess/yourmoney/12view.html?pagewanted=
all&_r=0
139

140. Video Clip Full Employment
Hyperlink
http://www.thenation.com/blog/169163/full-
employment-possible-robert-pollin-video#
140

141. Pollin Video Clip Full
Employment Hyperlink
http://truth-out.org/opinion/item/10918-
bob-pollin-the-full-employment-debate
141

142. Excellent Video Clips and
Definitions of Economic Terms
http://www.investopedia.com/terms/e/econ
omic-stimulus.asp
142

143. Your Essay Topic
Organize your ideas and prepare to
write an essay that discusses the
issues regarding increasing
employment opportunities for
Americans. Include a proposal to
recommend methods that will help
achieve full employment for the
American economy.

144. Organize Your Ideas
Review all of your notes
from the presentations,
group discussions, and
research notes.
Select the most important
ideas.
Choose facts and
examples to support each
important idea

145. Develop a Writing Plan
Determine what your
main point will be, and
write a topic sentence
that provides focus for
your essay.
Choose several main
ideas that support your
topic sentence.
Sort your information
into supporting details
with facts and
examples.

146. Details Must Support the
Main Ideas
Provide specific
facts, examples,
and reasons for
each main idea
in the body of
your essay

147. Write the Rough Draft
Use the Five
Paragraph
format that
includes an
Introductory
Paragraph,
Body, and
Conclusion

148. Prepare to Write
Write a five paragraph essay about
achieving full employment in the
American economy.
As you write your rough draft, it will
be very important to use special
words that enable you to transition
smoothly from one idea to the next.
148

149. Transition Words
As you view these
words, select the
words that help
you make
transitions
smoothly from one
idea to the next.
as a result
such as
for example
nevertheless
for that reason
finally
at this time
therefore
furthermore
in addition
in conclusion
as well as
149

150. Review, Edit, and Rewrite
1. Re-read your essay several times.
2. How can you improve your
sentences to communicate more
clearly?
3. Are your main ideas supported by
examples and details?
4. Exchange papers with another
student and read each other’s essay
out loud.
5. Make final corrections and write
the final draft of your polished essay.

151. Unit Assessment
The common core standards assessment includes the
following:
PowerPoint Notes
Research Project One: Notes, Proposal and Participation
Research Project Two: Notes and Research Paper
Research project Three: Three Pages of Notes
Research Topic Essay
Project
Final Unit Test
151

152. Final Unit Test
1. Analyze the economic conditions
under which unemployment increases.
Propose methods that could be used
to move closer to full employment.
Include sound arguments supported
by examples and details.
2. Compare and contrast the Great
Depression and the Great Recession
of 2008. Describe the role played by
the government during both economic
downturns. Determine if the role
played by the government was
successful. 152

153. 3. There are many different viewpoints on
how to deal with a poor economy.
Describe an effective method for ending
an economic recession. Take a position on
the best methods and provide supporting
arguments.
153