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Beginning Activities

In today's lesson, we will explore Gross Domestic Product (GDP) and the fluctuations in price levels. You will construct your own price index using at least five chosen items, drawing on concepts from the textbook. Emphasis will be placed on understanding major price indices, including the Consumer Price Index and the Producer Price Index. We will discuss how real GDP adjusts for inflation, allowing for meaningful comparisons over time. The lesson aims to equip you with economic insights relevant for responsible citizenship.

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Beginning Activities

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Presentation Transcript

  1. Beginning Activities • Title today’s lesson: GDP and Changes in the Price Level • Beginning Activity: Construct a Price Index • Mission Statement: To prepare you for a life of responsible citizenship • Daily Expectations: • Come in quietly and get to work immediately • Pay attention and be respectful • No phones • No food or drinks other than water • Do your work • Give AP quality effort • 5 bonus points for supplies

  2. Extra Credit • 5 points each 6 weeks for bringing supplies: • Paper clips • Pens • Paper • Staples • Tape

  3. GDP and Changes in the Price Level Chapter 13: Economic Performance

  4. Construct a Price Index • Use the section on “Constructing a Price Index” on pages 351-352 to create your own price index. • Use at least five items that you choose. • If you need help let me know.

  5. Major Price Indices • Consumer Price Index reports on 90,000 items in 364 categories in 85 geographical regions in the United States compared to 1982-84. • Producer Price Index measures price changes paid by domestic producers for their inputs. • Implicit GDP price deflator is an index of average levels of prices for all goods and services in the economy. It’s compared quarterly and has a base year of 1996/

  6. Real vs. Current GDP • Real GDP takes out inflation. • Real GDP = (GDP in current dollars/implicit GDP price deflator) X 100 • This allows economists to make comparisons with past years.

  7. Ending Activity • Page 355: Profiles in Economics • Make sure the floor is clean • Connect to our objectives: How does this prepare you for life and the future?

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