Georgia Council on Economic Education w w w . g c e e . o r g

Macroeconomics and the Georgia Performance Standards

Mike RaymerProgram Manager

The Mission

To help teachers teach those students, K-12, in the public and independent schools of

Georgia

The Vision

• Productive Workers• Informed Consumers• Involved Citizens• Prudent Savers• Wise Investors• Sound lifelong decision makers in a

globally interdependent world

Students leaving school prepared for their roles as:

EOCT Pass Rates

Economics Test Data Trend

Domain Performance for the 2008-2009 EOCT

DomainWeight Number

of ItemsAvg. CorrectFall Spring

% Correct Fall Spring

Fundamental2 weeks

20.5% 14 7.8 8.3 56% 59%

Micro4 weeks

22% 15 8.6 8.7 57% 58%

Macro5 weeks

20.5% 14 7.6 7.7 54% 55%

International2 weeks

18% 12 6.7 7.1 56% 59%

Personal Finance2 weeks

19% 13 8.2 8.3 63% 64%

Handout

GPSPerformance standards provide clear

expectations for instruction, assessment, and student work. They

define the level of work that demonstrates achievement of the

standards, enabling a teacher to know “how good is good enough.”

(www.georgiastandards.org)

Handout

Domain Focus

SSEMA1

The student will illustrate the means by which economic activity is measured.

Domain Focus

SSEMA2

The student will explain the role and functions of the Federal Reserve System.

Domain Focus

SSEMA3

The student will explain how the government uses fiscal policy to promote price stability, full employment, and economic growth.

Macro Pacing

Option #1: Five weeks of fury

Option #2: Three weeks of indicators, two weeks fiscal/monetary

Option #3: Three weeks of indicators, one week fiscal, one week monetary

The Macro “Must Haves”

Circular Flow Model

Business Cycle

GDP

Expenditure Approach

GDP=C+I+G+(X-M)

Aggregate Demand

Aggregate Supply

Types of Unemployment

1. Structural2. Cyclical3. Frictional

Questions?

Where to Begin?

Liberal Moderate Conservative

Georgia Council on Economic Education w w w . g c e e . o r g

Georgia Council on Economic Education w w w . g c e e . o r g

Where to Begin?

Unemployment The Federal ReserveGDP Government SpendingInflation TaxationRecession Federal DebtDepression Federal Deficit

Gross Domestic Product

• Gross= total

• Domestic= produced anywhere in the 50 states, by anyone

• Product= final goods and services

What does GDP measure?

Total amount of final goods and services produced in a country

in one year.

(Measure of Output)

Are there any cool formulas you can give us relating to this

interesting concept?

GDP=C+I+G+(X-M)

• C= consumption spending (think consumers)

72%• I= investment spending

(think businesses investing in themselves)

15%• G= government spending

17%

• (X-M)= difference between exports and imports

-4%

What is counted in GDP?

• FINAL goods and services

• Goods/Services produced here, even if by a foreign co.

What is NOT counted?

• Things produced outside the country.

• Illegal stuff

• Purely financial transactions

…and INTERMEDIATE GOODS

Problems associated with GDP

• Slow to calculate

• Does not count everything (it’s an estimate)

• Inflation can distort the figure

Real vs. Nominal

Per Capita GDP

GDP divided by a country’s population

GDP practice(all about GDP)

Demonstration Lesson #1

Aggregate Demand and Aggregate Supply Lesson

AD/AS

Questions?

“Bag of Mystery”

Inflation

Teaching Tools for MACROECONOMICS from John Stossel

• 15 Video Clips• Instructor’s Manual• Segment Description• Preview Question• Discussion and Analysis Questions• Extension Activities• Multiple-Choice Questions

What You Get…

Clip 2- Nominal Values vs. Real Values

SSEMA2b

Demonstration Lesson #2

Money and Inflation

Inflation Calculator

www.bls.gov

Commanding Heights

Georgia Council on Economic Education w w w . g c e e . o r g

Questions?

Am I Unemployed?

1. Structural2. Cyclical3. Frictional

Unemployment

Structural Unemployment

Cyclical Unemployment

Frictional Unemployment

Demonstration Lesson #3

Unemployment

Questions?

Debt v. Deficit

• What is the national debt?• What caused the national debt?• Where does the government get the

money when it wants to spend more than it takes in?

• What is a budget deficit?• What is a budget surplus?

Questions for You

Demonstration Lesson #4

Should we worry about the national debt?

Georgia Council on Economic Education w w w . g c e e . o r g

1. Will the national debt cause the US to go bankrupt?2. Are the interest payments on the debt important?3. What about paying off the debt by increasing taxes?4. Does running deficits today, and adding to the national debt, put a burden on future generations?

www.usdebtclock.org

Clip 12- Is Govt. Too Big?

SSEMA3b

Fiscal Policy

Actions taken by the Federal Government to influence the economy (business cycles).

How do they do it?

Taxation (revenue)

Spending (expenditures)

-transfer payments-

How/When/Why

If the economy needs a “boost” the Federal Government might:

_______________ taxes.

_______________ spending.

How/When/Why

If the economy needs to be “cooled off” the Federal Government might:

_______________ taxes.

_______________ spending.

Demonstration Lesson #5

How Can Changes in the Federal Government’s Budget Stabilize the

economy?

Questions?

Monetary Policy

The actions the Federal Reserve (Central Bank) takes to

influence the level of GDP and the rate of inflation in the

economy.

Monetary Policy DVD

Tools of the Fed:

1. Open Market Operations

2. Discount Rate (Fed to banks)

3. Federal Funds Rate (bank to bank)

4. Reserve Requirements

How Do They Do It?

Open Market Operations Simulation

How/When/Why

If the economy needs a “boost” the Federal Reserve might:

_______________ bonds._______________ interest rates._______________ reserve requirements.

How/When/Why

If the economy needs to be “cooled off” the Federal Reserve might:

_______________ bonds._______________ interest rates._______________ reserve requirements.

Questions?

Demonstration Lesson #6

The Monetary Policy Game

Lesson Ideas for the GPS Handout

Georgia Council on Economic Education w w w . g c e e . o r g

www.gcee.org

Georgia Council on Economic Education w w w . g c e e . o r g

www.georgiacouncil.blogspot.com

Workshop: Macroeconomics

Workshop Leader: Mike Raymer

mraymer@gsu.edu

Georgia Council on Economic Education w w w . g c e e . o r g