ECONOMY

= Economy = = = =**//__Vocabulary/ Info__//**=
 * **Economic**s- study of choices
 * **Economy**- The system in which all these different people and groups interact.
 * **Macroeconomics**- deals with broad issues that impact the economy as a whole.
 * **Microeconomics**- focuses on the study of individual choices or decisions made by smaller units.
 * **Demographics**- the study of human population.
 * **Baby Boom**- a period of very high birthrights that occurred between 1946 & 1964.
 * **Gross domestic product**- the dollar amount or GDP.
 * **Recession**- period of time in which the economy is shrinking.
 * **Depression**- Severe recession.
 * **Business** Cycle- Alternating periods of shrinking and growth, or expression
 * **Inflation**- a sustained increase in the general level
 * **Consumer Price Index**- Comparing previous prices to see if there growing.

=** Economics **= Is the study of choices they assume that people cannot simply have everything they need and want they decide what they need and what they want. Economy will not mess up your financial life. Building one involves making choices the choices or actions of good decisions.

Historically, the economy goes though alternating periods of shrinking and growth, or expansion. This pattern is known as the **__business cycle__**. It is one full period of economic growth followed by a period of **__recession.__** One way you can measure national economic activity is by keeping track of the **__total dollar amount__** of all final goods and services purchased in a given year. This dollar amount is known as the **__gross domestic product, or GDP.__**

When the GPD is higher from year to year it is because businesses are selling and more goods and providing more services. This means the economy is growing and people are generally earning a higher income.

When the GPD is lower it means that the economy is shirking due to the fact businesses and services are doing poorly, otherwise known as a recession.

During a depression, and a recession the risk of jobless and layoffs are much greater.

The increase in the general level of prices is called inflation. When inflation happens the value of the dollar goes down.

The study of human populations is called demography, the U.S. census which occurs every 10 years, the studies include race, education, gender, and age. Understanding the census can help us predict certain needs in advance.

=**Example Problems**=


 * 1) Assume by 2040 there are 79 million workers retiring out of a 250 million work force. Now the retirees are drawing social security. **//How Many Workers will be paying per retiree in 2040?//**
 * 2) Factory X in the US pays 200 workers a total of 10 million each year to produce 2 million widgets, but factory B, in Spain, and it's workers produce double the widgets at 12 million dollars. **//How do the costs per widget of the American and Spaniard factory compare?//**