Post on 13-Jan-2016
Copyright © 2007 South-Western. All rights reserved.
Chapter 3Assessing Economic Conditions
Copyright © 2007 South-Western. All rights reserved.
Assessing Economic Conditions
Portion of Graphic from pg 72 will go
here
Learning Objectives
Assessing EconomicConditions
Growth Inflation
Government Interest Rates
Market Prices
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Assessing Economic Conditions
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The Key Decisions in Running a Business
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Assessing Economic Conditions
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Economic Growth
GrowthInflationInterest RatesMarket PricesGovernment
Weak
Strong
Recession
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Assessing Economic Conditions
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Growth Indicators
GrowthInflationInterest RatesMarket PricesGovernment
G.D.P.
Production
AggregateExpenditures
Spending
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Assessing Economic Conditions
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Unemployment
GrowthInflationInterest RatesMarket PricesGovernment
Structural
Frictional
Cyclical
Seasonal
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Assessing Economic Conditions
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Inflation
1985
1995
2005
$
$$$$$GrowthInflationInterest RatesMarket PricesGovernment
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Assessing Economic Conditions
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Types of Inflation
GrowthInflationInterest RatesMarket PricesGovernment
Demand-PullCost-Push
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Assessing Economic Conditions
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Interest Rates
GrowthInflationInterest RatesMarket PricesGovernment
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Assessing Economic Conditions
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Interest and Revenue
GrowthInflationInterest RatesMarket PricesGovernment
Interest Rates (%)
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Assessing Economic Conditions
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Determining Market Prices
GrowthInflationInterest RatesMarket PricesGovernment
Insert Exhibit 3.4(only top portion)
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Assessing Economic Conditions
Portion of Graphic from pg 72 will go
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Determining Market Prices
GrowthInflationInterest RatesMarket PricesGovernment Insert Exhibit 3.4
(only bottom graph portion)
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Assessing Economic Conditions
Portion of Graphic from pg 72 will go
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Demand Schedule
GrowthInflationInterest RatesMarket PricesGovernment
Pri
ce
Quantity
(S1)
(D1)(D2)
P1 = $ 2,000
P2 = $ 2,500
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Assessing Economic Conditions
Portion of Graphic from pg 72 will go
here
Supply Schedule
GrowthInflationInterest RatesMarket PricesGovernment
Pri
ce
Quantity
(S1)
(D1)
(S2)
P1 = $ 2,000
P2 = $ 1,500
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Assessing Economic Conditions
Portion of Graphic from pg 72 will go
here
Influencing Market Prices
GrowthInflationInterest RatesMarket PricesGovernment
Production Expenses
Consumer Income
Consumer Preferences)))) ) )
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Assessing Economic Conditions
Portion of Graphic from pg 72 will go
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Monetary Policy
GrowthInflationInterest RatesMarket PricesGovernment
FOMC
The Fed
Money supply
Interest Rates
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Assessing Economic Conditions
Portion of Graphic from pg 72 will go
here
Fiscal Policy
GrowthInflationInterest RatesMarket PricesGovernment
Excise Tax
Personal Income Tax
Corporate Tax
Budget Deficits
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Assessing Economic Conditions
Portion of Graphic from pg 72 will go
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Government Influence
GrowthInflationInterest RatesMarket PricesGovernment
Insert Exhibit 3.8