Sunday, January 23, 2011

Post 25b

Mr. Campbell asked us to find the Gini Indexes for the nations of the world and react to what that says about America.

The US's Gini index is about 0.4, which is 44th in the whole world. Its like this because the US follows capitalism, which basically means anyone can make as much money as they want. No ones going to stop them, but they need to  take risks to be rich. Anyone can make as much money as they want no matter who they are. I believe that the index will stay between 0.35- 0.45 for a long time, as long as the country doesn't change to a different form of government.

Post 25a

Mr. Campbell asked us to find one group of Americans that would love inflation and explain why.

I believe that the group of Americans that would love inflation would be anyone who has a mortage. This is because as inflation lowers the 'value' of money, their mortage stays the same. As the inflation lowers the 'value' of money, the person buying the house is, in a way, paying less then what they had agreed on.

Saturday, January 22, 2011

Post 24

Mr. Campbell asked us to create 4 scenarios for our life  to describe the 4 types of unemployment.

Structural Unemployment- I use to weld car frames together. Because of the cost to train me, they bought a machine that requires no training and will pay for itself sooner or later.

Frictional Employment- While I was in college I worked at Shop Rite. Now the I have a degree in physics, I can go to work designing roller coasters for Six Flags Great Adventure.

Cyclical Unemployment- I worked in the Labor Union, and because of the recession I am now unemployed.

Seasonal Unemployment- I worked at somebodies house selling Christmas trees, but because its not Christmas season anymore I am unemployed until next year.

Wednesday, January 19, 2011

Post 23

Mr. Campbell asked us to make a western style wanted poster for unemployment, inflation, or poverty.

I chose inflation:

Post 22

Mr. Campbell asked us to take three quizzes and write 15 facts that we've learned from them.

1) Unemployment rate is the most closely watched and highly publicized labor force statistic.

2) Marginally attacked workers are people who once held productive jobs but have given up looking for work.

3) Frictional unemployment is unemployment attributed to workers moving from one job to another.

4) Structural unemployment is unemployment that results from changes in technology or in the way the economy is structured.

5) Discouraged workers are people who want jobs but have stopped looking for work for job-related reasons.

6) A supply shock is an event that increases the cost of production for all or many firms.

7) To construct the consumer price index, the Bureau of Labor Statistics selects a sample of commonly purchased consumer items, called the market basket.

8) The worst degree of inflation is called hyperinflation.

9) Aggregate supply is the total amount of goods and services produced throughout the economy.

10) Economists use price indexes to calculate the inflation rate.

11) The income gap between the richest and the poorest Americans was wider in the 1990s than at any other time since World War II.

12) Poverty thresholds are adjusted annually based on changes in the consumer price index.

13) To measure the amount of inequality in the distribution of income, economists plot a Lorenz Curve.

14) The data used to plot a Lorenz Curve can also be used to compute the Gini Index.

15) One potential cause of the widening disparity in incomes in the United States is the increase in divorce rates and out-of-wedlock births.

Thursday, January 13, 2011

Post 21

Mr. Campbell asked us to make a terms lists of the following terms.

National Income Accounting- Process used for tracking production, income, and consumption in a nations economy

Gross Domestic Product- Total value of all final goods and services produced within a country in a given year

Output Expenditure Model- A method of computing the GDP by adding the total value of consumer and government spending

Personal Consumption Expenditure- Total spending by consumers for durable goods, nondurable goods, and services during a specified period of time

Gross Investment- Total value of private spending in the economy for capital assets

Nominal GDP- The value of a nations GDP at the current prices of the period being measured

Real GDP- The value of a nations GDP after it has been adjusted for inflation

Price Index- A set of statistics that allows economists to compare prices over time

Underground Economy- Illegal economic activities or unreported legal activities that are not accounted for in national income measures

Gross National Product- Total value of all final goods and services produced with factors of production owned by citizens of a different country

Business Cycle- A recurring pattern in economic activity that is characterized by alternating periods of expansion and contraction

Expansion- A period of the business cycle during which economic activity is increasing toward a peak

Peak-The point of the business cycle during which employment production and wages are at their highest

Contraction- A period in the business cycle during which business activity slows down and overall economic indicators decline

Recession- Substantial and general decline in over all business activity over a signifigant period of time

Depression- A prolonged and severe recession

Trough-The lowest point of the business cycle

Leading Indicators- Set of economic factors that anticipate the expansions and contractions of the business cycle from one month up to two years before similar changes in overall economic activity occur

Coincident Indicators- Set of economic factors that move up or down with the economy

Lagging Indicators- Set of economic factors that help economicts predict the duration of economic up or downturns

Real GDP Per Capita-The dollar value adjusted for inflation of all final goods and services produced  per person  in an economy in a given year

Labor Productivity- Measure of how much each worker produces in a given period of time

Productivity Growth- Increase in output per worker per hour worked

Capitol-to-labor ratio- Amount of capital resources available per worker

Capital Deepening- The increasing of capital resources at a faster rate than the increasing of the labor force

Tuesday, January 11, 2011

Post 20

1) Gross national product, national income accounting, Macroeconomists use measures called national income and product accounts (NIPAs) to track production, income, and consumption in a nation's economy. This traking process is known as national income accounting and provides information about a nation's economic activites. (229)

2) Real GDP, nominal GDP, nominal GDP is just another name for current GDP. (232)

4) National income accounting, gross national product, Until December 1991 the Commerce Department used a NIPA called gross national product (GNP) to measure the U.S. economy. (234)

7) Lagging indicators, coincident indicators, These coincident indicators change as the economy moves from one phase of the business cycle to another and tell economists that as upturn or downturn in the economy has arrived. (240)

8) Coincident indicators, lagging indicators, Lagging indicators change months after an upturn or a downturn in the economy has begun and help economists predict the duration of economic upturns or downturns. (240)

9) 9, labor productivity, I wrote the number of the question instead of the letter 'k,' which was labor productivity.

Post 19

Mr.Campbell asked us to design a visual that explains and defines the four parts of GDP and the 3 rules for calculating it.

Post 18

Mr.Campbell asked us to visit @cybraryman1's economics website and select and explain three sites that we would like to use on the midterm.

Free Economic Data Economic, Financial, and Demographic
-I would like to use this site because you can search for most economic terms, this would be useful because if I don't know what one of the terms are on the test I could look it up on this site.

AmosWeb Economic Gloss'arama
-This site would also be useful, for many of the same reasons as the last site. This site has list of all economic terms all we have to do is click the letter that the term starts with and find the word and find out what it means.

The Mint
-This site would be useful as a study site. This is because it has mini and fun quizzes that anyone can have fun on. This would help me because its a great studing site, for most economic terms that we would need to know on the midterm, which is also fun at the same time.

Post 17

Mr. Campbell asked us to find and post three graphs or charts that explain the theory of business cycles. Explain the strengths and weaknesses of each. Name and give an award to the "best" business cycle.   Explain why you chose the one you selected in 4-6 sentences.

Strength- Everything is in equilibrium (sine curve), recoveries and recessions are equal length.
Weakness- Long recession, but not a steep drop.

Strength- GDP looks very high at the peak.
Weakness- Big drop in GDP during recession, longer time to recover, than to go into recession.

Strength- Output gets higher everytime the company reaches its peak.
Weakness- Longer time to recover from trough because graph is going continuously rises over time.

I think that the third graph is the best. I believe this because every recession takes about the same time to recover from. And during every recession the level of output goes up. Which is the same for every recovery, in which the total output gets higher and higher as the company reaches its peak.

Monday, January 10, 2011

Post 16

Mr. Campbell asked us to create a visal that would help us on the Chapter 10 test. I made one on the Business Cycle:

Thursday, January 6, 2011

Post 15

Leading - These types of indicators signal future events. Think of how the amber traffic light indicates the coming of the red light. In the world of finance, leading indicators work the same way but are less accurate than the street light. Bond yields are thought to be a good leading indicator of the stock market because bond traders anticipate and speculate trends in the economy (even though they aren't always right).

Lagging - A lagging indicator is one that follows an event. Back to our traffic light example: the amber light is a lagging indicator for the green light because amber trails green. The importance of a lagging indicator is its ability to confirm that a pattern is occurring or about to occur. Unemployment is one of the most popular lagging indicators. If the unemployment rate is rising, it indicates that the economy has been doing poorly.

Coincident - These indicators occur at approximately the same time as the conditions they signify. In our traffic light example, the green light would be a coincidental indicator of the associated pedestrian walk signal. Rather than predicting future events, these types of indicators change at the same time as the economy or stock market. Personal income is a coincidental indicator for the economy: high personal income rates will coincide with a strong economy.

Leading- Housing market

Lagging- Unemployment rate

Coincident- Non-farm payrolls

Post 14

Mr. Campbell asked us to write a reaction to a youtube video – My Humps” and the Business Cycle Rap. Then to watch this Qwiki and to find a link to a better video or website for Business cycles. Also to determine if it was helpful or silly? And what source was more useful?

I thought that these videos were a little silly, but useful. I think that this is a good idea for a class project because it helps the students learn about the subject, as well as having fun at the same time.

Wednesday, January 5, 2011

Post 13

Mr.Campbell asked us to take three quizzes, and to explain 10 things that we learned or things that got 'cleared up.'

1) War is considered an external factor

2) Indirect Taxes are included in final tax price

3) US does not have to import lumber or coal, only oil

4) Economic Growth is essential to prosperity

5) American productivity growth has slowed down since the 60's

6) A business cycle is just a market fluctuation

7) The great depression was the most severe contraction in the American Economy

8) Economists track things using "National Income Accounting"

9) There is a separate economy called the underground economy

10) To calculate GDP economists use output-expenditure model
6) A business cycle is just a market fluctuation

Post 12

Mr. Campbell asked us to write a letter to the editor about how GDP is a faulty indicator.

To whom this may concern,

The GDP is a faulty indicator to calculate the total market value of all goods and services during the year. This is because it treats crime, divorce and natural disasters as economic gain. It ignores the non-market economy of households and the communities. It also treats the depletion of natural capital as income and it increases with pollution activities and as well as the clean up of the pollution. GPI, Genuine Progress Indicator, is a better indicator because it includes the non-market economy of households and the communities.

Tuesday, January 4, 2011

Post 11

Mr. Campbell asked us to use the 4x3 technique. 3 rules and 4 ingredients to create a recipe or math forula that explains how GDP is calculated.

GDP = private consumption + gross investment + government spending + (exports − imports)

-Includes only goods and services purchased by their final users, so GDP measures final production.

-Counts only the goods and services produced within the country's borders during the year, whether by citizens or foreigners.

-Excludes financial transactions and transfer payments since they do not represent current production.

Monday, January 3, 2011

Post 10

Mr. Campbell asked us to write what we think macroeconomics is all about? What interests us about this topic? and to list three things that we hope to learn.

I think macroeconomics is going to be about the study of economics of the whole. For example, not just one company, but all the industries in that line of business. The that interests me the most is how they calculate inflation and how they can tell how much it will go up or down. I would like to learn about inflation, GDP, and how they calculate/predict interest rates.