1. Chapter 2
Measuring Economic Activity

2. GDP
• Gross Domestic Product
• Total dollar value of all final goods and
services produced in a country during one
year.

3. GDP per capita
• Gross Domestic Product
• Output per person
• Divide GDP by the total population

4. Unemployment Rate
• The portion of people in the labor force who
are not working.
• People are considered unemployed if they are
looking for work and willing to work but
unable to find a job.

5. Productivity
• Output per worker
• Examples:
Improvements in
equipment or
technology, training,
management
techniques, etc.

6. Personal Income
• Salaries and wages as
well as investment
income and
government payments
to individuals.
• Provide foundation for
buying goods and
services.

7. Retail Sales
• Sales of durable and non-duralable goods
bought by consumers.
• Indicator of general consumer spending

8. Business Cycle
PROSPERITY RECESSION
DEPRESSION RECOVERY

9. Business Cycle
PROSPERITY
• Period in which most people who want
to are working
• Businesses produce goods and services
in record numbers, wages are good,
and the rate of GDP growth increases.

10. Business Cycle
RECESSION
• A period in which demand begins
to decrease, business lower
production
• Unemployment begins to rise
• GDP growth slows

11. Business Cycle
DEPRESSION
• A phase marked by a prolonged
period of high unemployment
• Weak consumers sales
• Business failures

12. Business Cycle
RECOVERY
• A phase in which unemployment
begins to decrease
• Demand for goods and services
increases
• GDP begins to rise

13. Inflation
• An increase in the
general level of prices.
• Buying power of the
dollar decreases

14. Deflation
• Decrease in general level of prices
• Usually happens with investment rates

15. National Debt
• The total amount owned by the federal
government

16. Chapter 1 and 2 REVIEW
In your book…
Communicate Business Concepts
Chapter 1 – 1, 2, and 5 (pg 28)
Chapter 2 – 1, 4, and 5 (pg 48)