Beruflich Dokumente
Kultur Dokumente
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Economics defined
ECONOMICS is the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
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* * How does Economics effect business * I. HOW ECONOMIC CONDITIONS AFFECT BUSINESSES
A. What Is Economics? B. Why Economics Was Known as the Dismal Science C. Growth Economics and Adam Smith D. How Businesses Benefit the Community.
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The English economist Thomas Malthus believed that population growth would outstrip resources. In response, Thomas Carlyle called economics THE DISMAL SCIENCE. Many still believe, like Malthus, that the solution to poverty is birth control. WORLD POPULATION is currently growing more slowly than expected. But population in the developing world will continue to climb quickly.
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Economic Theories
Adam Smith (1776)
Wrote one of the most important works on Capitalism Economics The Wealth of Nations Freedom is vital Invisible Hand
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Economic Theories
Thomas Malthus (Early 1800s)
Studied the impact of population growth Dismal Science Too many people
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Supply Curve
High
Price(P)
S
Low
Quantity(S)
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High
Demand Curve
High
Price(P)
D
Low
Quantity(D)
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High
Equilibrium Point
High
Surplus
Price
Market Equilibrium
S
Low
Shortage
D
High
Quantity
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Understanding Competition
Economies describe competition as Perfect Monopoly Oligoply Monpolistic
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Adam Smith
Wrote the Wealth of Nations Adam Smith (1776)
Freedom is vital Invisible Hand
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Free-Market Competition
Monopolistic Oligopoly Competition
One
Monopoly
Many
Perfect Competition
Sellers
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How many Buyers? How many Sellers? What power or influence does the seller have over the market ? How similar are the products?
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Perfect Competition
Sellers
Buyer
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Perfect Competition
Unlimited number of buyers and sellers no one can influence the market
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Monopolistic Competition:
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Microsoft?
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Limits of Free-Markets
Inequality of Wealth- Causes National & World Tension Greed Compromises Ethics Limitations Push Country towards Socialism = Government Regulation
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(Highly Controlled)
(Little Control)
Communism
Capitalism
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Capitalism Private Property Business Ownership/ Profits Freedom of Competition Freedom of Choice
These are referred to as the Rights of Capitalism
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III. UNDERSTANDING SOCIALISM A. The Benefits of Socialism B. The Negative Consequences of Socialism
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Socialism
Private & Public Ownership Some Choices are Limited
40%
50%
60%
70%
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Communism
Public Ownership
Almost all major factors of production
Shortages of food and other products may develop Lack of motivation to work hard for business people 2-30
* * What is the major difference between * free markets and controlled markets To what extent does government control or regulate the economic activity Minimum Wage Taxes Right to compete Right to open a new business
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Mixed Economies
Free-Market Economy = Capitalism Command Economy
Socialism Communism
* How does Economics effect business * * VI. UNDERSTANDING THE ECONOMIC SYSTEM OF THE UNITED
STATES A. Key Economic Indicators 1. Gross Domestic Product 2. The Unemployment Rate 3. The Price Indexes B. Productivity in the United States C. Productivity in the Service Sector D. The Business Cycle E. Stabilizing the Economy through Fiscal Policy
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Percent*
85 84 81 78 71
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U.S. Economy
Key Economic Indicators Productivity in the U.S. Productivity in the Service Sector Business Cycles
Recession Depression Recovery
Stabilization
Fiscal Policy National Debt
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14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1940
In Billions of U.S. $
1950
1960
1970
1980
1990
2000
2002
2005
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55 22 5 3 7 21 13 6
Latin America
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16 14 12 10 8 6 4 2 0
1940
1950
1960
1970
1980
1990
2000
2002
2005
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Other 5%
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50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
Federal Spending
1966 2006
Social Security
Interest
Defense
Other
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2004
2006
2008
2010
2012
% of GDP
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Deficit in Millions
-400000 -500000 -600000 -700000 -800000 1980 1985 1990 1995 1999 2001 2003 2005
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14 12 10 8 6 4 2 0
Border & Port Security
Aviation Security
Immigration Enforcement
BioDefense
Infrastructure Protection
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