Social Studies Economics GED Support Kristina Gonzales BS

Social Studies Economics GED Support Kristina Gonzales, BS, MHA

Economics Gonzales, Fall 2017

Lesson 1: Basic Economics Concepts • Capital things that can produce income – Example: money, land, buildings • Businesses invest in capital to create goods & services Sell for profit • Labor work of human beings, transforms capital and materials into goods and services that can be sold -make capital investment to build a factory & install equipment for production Computer business -must hire workers & managers to build -buy materials & parts = producer goods -finished product to sell = consumer goods

Lesson 1: Basic Economics Concepts • Markets established routines and networks for selling and buying good ands services • Producers markets for producer goods: retail and wholesale for consumer goods • Raw material markets minerals • Financial markets selling stocks and bonds • All markets are regulated by law to some extent • Goods and services are distributed through markets so they are consumed where they are wanted

Lesson 1: Basic Economics Concepts • In the market system, sellers and buyers compete! – Consumer electronics market for computers • Prices are determined – Price is related to supply and demand – Sellers need to earn money and buyers want to spend as little as possible – When supply is large; buyers shop around for best price and sellers drop prices to move their inventory – If product is scarce, buyers don’t really shop around and prices raise *supply and demand influence price in the free market economy US economy operates as a free market; determined by open market and consumers

Lesson 2: The US Economic System • In the US, economic activity of individual people and businesses primarily determines our economic health and growth • Ways to earn incomes: -accept employment –entrepreneurs –build own business • These freedoms are based on Laissez faire capitalism believed that if individuals act in their own best interests economically, the sum total of their actions will be In the best interest of society (take their own course) • For businesses to grow larger, expand capacity or integrate a broader set of functions into their operations in order to make profit

Lesson 2: The US Economic System • Businesses not allowed to form monopolies single companies that control whole industries • Oligopolies tight knit groups of companies that control whole industries • Economy is unpredictable and not controlled by government • Business cycle

Lesson 2: The US Economic System • Growth • Saturation • Recession lost of jobs, and less spending • Inflation= combined price of good and services grows faster than the purchasing power of the currency

Lesson 2: The US Economic System • Banking and investments conducted on free enterprise • Major role of banks and savings and loan associations to create pools of savings in order to make money available as credit to businesses and consumers • Stock exchange allow investors to purchase shares of stock which represent part ownership of a business • Business grow due to funds available

Lesson 3: The Economy & the US Government • The executive & the legislative branches set the US budget • The government determines our taxes, employs people, and borrow and spend much money • surplus of revenue elected leaders may either spend the additional finds or cut taxes • Deficit requiring the government to borrow money to cover its expenses • Responsible for maintaining good conditions for our free market system • Laws and courts in place to maintain property rights • Stable currency US mint, makes coins and paper money

Lesson 3: The Economy & the US Government • Central banking system Federal Reserve System, manages the total amount of money available for lending and borrowing in the private banking system and partially controls interest rates • Federal Deposit Insurance Corporation (FDIC) insures the money in individual bank accounts in case of bank fraud or failure • Federal government promotes the general welfare of the nation – Free market does not distribute wealth according to what people need to live on, collect taxes • Infrastructure interstate highways, supports economic activity • Occupational Safety & Health Administration (OSHA) special federal agency charges to protect workers on the job • Food & Drug Administration (FDA) making sure food products are safe • Federal Trade Commission (FTC) ensures product claims in advertising & on package labels are true & complete

Lesson 4: Labor & Consumer Issues • Workers…earn wages & benefits in exchange for labor – Aid for only what they do – Earnings fluctuate – Salaries – Piecework – Benefits – Compensation combined value of wages & benefits • Workers & employers…pay taxes & buy insurance • Unemployment • Economic changes cause lost of jobs

Lesson 4: Labor & Consumer Issues • Labor unions in certain industries and professions • Collective bargaining inions negotiate contracts for wages and fail, so unions strike workers refuse to work • Mediators intervene • We all participate in the US economy as consumers