The Economy
Explore the fundamental concepts of economics, including macroeconomics and microeconomics, GDP, market structures, government debt, and more. Enhance your financial planning knowledge by understanding how the economy influences your future decisions and career path.
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Presentation Transcript
THE ECONOMY COACH LETT
INTRO TO ECONOMICS Economics-the study of choices The system in which all the different people and groups interact is called the economy.
Macroeconomics- deals with broad issues that impact the economy as a whole Microeconomics- focuses on the study of individual choices or decisions made by small units, such as a firm
GDP- Gross Domestic Product The total dollar amount of all the final goods and services purchased within the nation s borders in each year The United States GDP was 20.92 trillion dollars. The GDP for Cuba is 103.1 billion dollars. Micornesia s GDP is 408.1 million dollars
ECONOMY- THE SYSTEM IN WHICH INDIVIDUALS, BUSINESSES, GOVERNMENTS, AND THE WORLD AS A WHOLE INTERACT. Recession- a Period in which the economy is shrinking Depression- A severe recession. Business cycle- Alternating periods of shrinking and growth, or expansion, in the economy. Inflation-a sustained increase in the general level of prices( 2% a year increase)
GOVERNMENT DEBT AND DEFICITS The government, in most years, spends more money than it collects in taxes. This is called a budget deficit, so the government must borrow money to make up the difference. Nation Debt currently exceeds 20 trillion dollars.
MARKETS: PHYSICAL PLACES OR VIRTUAL LOCATIONS WHERE PEOPLE BUY AND SELL GOODS OR SERVICES. Market Structure Perfect competition- markets where firms have no influence over price Monopolistic competition- have many sellers that attempt to differentiate their products in some way, these differences allow the firms to charge different prices Monoploy-a market with only one seller Oligopoly- markets where there are a few large interrelated firms(car industry)
ECONOMICS AND YOUR FINANCIAL PLAN Understanding more about the economy will help you better plan your future, your career, and your financial planning.
UNEMPLOYMENT Frictional unemployment-unemployment associated with job switching Structural unemployment- this is due to structural changes in the economy and its permanent( employees often need to retain or acquire new skill sets to gain employment Cyclical unemployment- this is due to recession phase of the business cycle
DEMOGRAPHICS Demographics is the study of human populations. (race, education, gender, age) Graying of America-a demographic shift to an older population Baby Boom- a period of vey high birth rates after World War II that occurred between 1946 and 1964.
PAYING TAXES Why is paying taxes important, and how does it affect an individual s finical plan?
Take-home pay- the difference between what workers earn and what they get to keep and use. Gross pay- the total amount of money earned (before taxes) Net pay-the amount of money an employee takes home after taxes and other deductions.
TAXES A TAX IS MONEY COLLECTED BY A GOVERNMENT FROM ITS CITIZENS FOR THE PURPOSE OF OPERATING THE GOVERNMENT. Sales Tax-tax paid on purchases (collected by the state) Real Estate Tax- taxes paid based on the value of the property Real Estate Taxes are used primarily to fund schools Payroll Taxes- Federal and state taxes withheld from a person s paycheck and sent to the government by his/her employer.
