STHM 1113 Lecture Notes - Lecture 2: Gross Domestic Product, Human Resources, Stock Market
3 May 2018
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• Economics: Distribution of resources for the production of goods and services within a social
system
◦ Resources
▪ Natural resources (lands, forests, minerals, water)
▪ Human resources (labor)
▪ Financial resources (capital, assets, money, revenue)
◦ Economic Cycles and Productivity
▪ Economic Expansion
▪ Economy is growing and consumers are spending money
▪ Present U.S. Economy
▪ Economic Contraction
▪ Spending declines, layoffs, economy slows down
▪ 2008 Great Recession
▪ Economic Cycles
▪ Inflation
▪ Condition characterized by continuing rise in prices, but the
value of the dollar doesn’t correspond with that
▪ Ex: Venezuela; citizens cannot afford basic goods
▪ Recession
▪ Decline in production, employment, and income
▪ Last recession was in 2008; collapse of housing market and
more
▪ Depression
▪ Unemployment very high; consumer spending low; business
output sharply reduced
▪ The Great Depression (1932)
▪ Unemployment
▪ % of population that wants to work but unable to find jobs; also
2008
▪ U6 Rate: Includes people who are unemployed but not
seeking a job
▪ U3 Rate: Percentage of people who are unemployed but
seeking a job
◦ How do we measure the health of an economy?
▪ How do we know if it is in good or bad shape?
▪ We look at key indicators, such as:
▪ Employment/Unemployment rate: How many people are
working or out of work? Are companies hiring?
▪ 4.3% as of May 2017
▪ Gross Domestic Product (GDP): The nation’s output of goods
and services produced in a year
▪ Recorded every 3 months on a quarterly basis
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