The Economy:The Basics

Are YOU a part of the economy?

• Do you have a job?• Do you spend money?• Do you own any natural resources?• Do you own any stocks or other investments?• Do you have a bank account?

Key ingredients:• Resources

– Natural resources• Capital

– Investment money. Not only includes “Wall Street” (Stock Market) but also your money.

• Labor– Workers

• “Agents”– The entities that create production, exchange, and

consumption of goods & services

The 4 Main Sectors of the EconomyRaw Materials Manufacturing

Services Research & Development

NOTE: All of these need capital to get started and/or expand

There are two other sectors which are “owners” of the other four:

Private Sector Public Sector

Privately run businesses & investment firms

Government run & taxpayer funded

If you have a job, where do you fit?

Where does Mr. Hartford fit?

Your parents?

U.S. Economy

• It is based on capitalism• In a capitalist system, the means of production

& distribution are privately owned

• Most people consider the U.S. capitalist• However, due to its large public sector, we are

technically a mixed economy (some socialist aspects)

Let’s go back to the beginning…:

• Resources• Capital• Labor• “Agents”

What happens if any of these key economic factors falter?

How about the 4 main sectors of the economy? What if any of these falter?

Raw Materials Manufacturing Services Research & Development

What if?…

Capital InvestorsWhat if?…

What if?…

• Based on what you learned today, how would you suggest we improve the United States economy?

• Do you think the politicians have made the right decisions?

• What recommendations would you have for our leaders to improve our economy?