7. US GDP Changes
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Write down 3 events that might have
either negatively or positively
affected the US GDP
For example: 1890âs Railroad
connections increased consumer
spending and investment
16. In your notes
Calculate the GDP for Portugal in
2008. (in millions)
Consumers spent: $131,300
Investment: $42,000
Exported $56,000
Imports $87,000
Portugal: 10 million
people
Government: $90,000
Currency: Euro
What is Portugalâs GDP per
Capita?
19. Great
Depression
1929-1933
27% drop in GDP
25% Unemployment
36% drop in World
trade
43 straight months
of declining
spending !!!!
Great
Recession
2007-2009
5 % drop in GDP
10% Unemployment
20% drop in World
trade
18 straight months
of declining
spending
Source Yoram Bauman, World Bank
20. Fiscal Cliff
Y = C + I + G + X >>>> (exports-imports)
Short Run
5% reduction in Government spending
Significant tax increases affect on I and C
What would a ________ say about this in SR and LR?
Keynesian
Classical Perspective (Hayek)
21.
22. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
US consumers spend 5% more in
2012, than 2011 for the Winter
Holidays.
23. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
Banks report 3 % increase in business
spending
24. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
US government passes $800 billion
healthcare reform bill
25. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
Mexican citizens demand 15 % fewer
US made cars
26. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
The internet is created
27. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
US students learn about the benefits
of saving money
28. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
Free trade zone extends from Canada
to Argentina
29. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
US military invades Iran
30. GDP = C + I + G + (Ex â Im)
Assuming everything else stays equal, what happens ifâŠ
World Demand for US timber increases
31. Assignment
What would happen to the GDP of the US ifâŠ(assume only 1 variable
changes)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
The government increases education spending by
$12 billion
Russians demand more US made cars
The US government decides the border fence is
too expensive and cuts its funding
US government places a tax on all Japanese
imports
Consumers get easier access to credit cards and
buy 35 % more video games this year
High school graduates get excited about the stock
market and invest 10% of their future incomes.
The price of food increases by 14% in 2010
US business become fearful of the coming
recession and slow spending by 4%
New modern warfare game released
Make up an example of your own, show GDP change.
32. Assignment
Create an assignment for the regular
students to do
#1 12 realistic scenarios for students to
choose the component. 3 for each part of
GDP. For example: 1965 US creates
Medicare (govt spending)
#2 2 GDP problems (C + I + G + X)
#3 Why is GDP per capita a better
measure of wealth than GDP?
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