Support materials for supply and demand

1. Macro Economics The real driver behind the Housing Bubble, current Unemployment, and the rise (and fall) of American economic supremacy Prof. Jeff Takle (857) 277-9050 | jeff.takle@gmail.com

2. Measuring an Economy Take what we’ve learned so far, and start applying it to a national economy

3. Calculate the Real GDP per capita CPI of 201.6 = 201.6% the price level of base year (1982) = 2.016 Use the following equation: Real GDP = Nominal GDP / CPI Did Real GDP go “up” or “down” from 2007 – 2009? $6.5 $6.7 $6.6 $22,259 $21,170 $21,812

4. Real GDP over the Last 80 Years

5. Economic Indicators Leading, coincident, and lagging

6. Leading Indicators 13,930  7,062 = 49% 380  42 = 89% 1900 2010

7. Coincident Indicators

8. Lagging Indicators Federal Interest Rate

9. Aggregate Supply & Demand for an Economy Pretty close to what we already learned, but for “countries”

10. Aggregate Supply & Demand 150 100 Price level 50 Real GDP (trillions of 2000 dollars) 0 2 6 8 12 16 4 10 14

11. Supply and Demand Curves are Shifting

12. Government Policies & Their Effects on the Economy Can you feel the excitement? 2min 40sec http://www.youtube.com/watch?v=UHes9WgieIo

13. Demand-side Economics The Democratic Party generally supports “demand-side” economics, using government spending to artificially increase demand, prices, and GDP. What’s the cost/risk? 150 100 Price level 50 Real GDP (trillions of 2000 dollars) 0 2 6 8 12 16 4 10 14

14. Supply-side Economics The Republican Party generally supports “supply-side” economics, using tax cuts to spur production, decrease prices, and increase GDP. What’s the cost/risk? 150 100 Price level 50 Real GDP (trillions of 2000 dollars) Demand-side versus Supply-side Which one is better? 0 2 6 8 12 16 4 10 14

15. Quiz Preparations