Based on what you know about each indicator, what might explain the relationship between GDP and the unemployment rate?

Based on what you know about each indicator, what might explain the relationship between GDP and the inflation rate?

Based on what you know about each indicator, what might explain the relationship between the unemployment and inflation rates?

How do these data show a pattern in the U.S. economy from 1929-1942?

The business cycle is a recurring pattern of change as an economy expands and contracts. During an expansion, economic activity increases until it peaks and can grow no more. During the contraction that follows, economic activity slows until it sinks into a trough and begins to turn around.

Recession: Real GDP must fall for at least 6 months in a row

Depression: Prolonged recession (6-18 months long)

***We attempt to keep the business cycle STABLE. Periods of extreme growth and decline are NOT desirable!!!

High GDP (Goal: 3-5% annual growth)

Low unemployment(Natural Rate: 4-6%)

Low inflation(Creeping Rate: 3.4% per year)

1932? 1936? 1938? 1941?

Why do you think economists classify this time period as a depression rather than a recession?

1932-1933?› FDR defeats Hoover in

presidential election & begins implementing “New Deal”

1936-1937?› 1936: Government modifies

taxes to tax wealthy people the most (<70%!)

› 1937: FDR is scared to do too much more deficit spending, & makes significant cuts

1940-41?› U.S. manufacturing is increasing

significantly› Japan’s 1941 attack at Pearl

Harbor angers Americans and transforms peacetime into wartime economy by mobilizing populace and numerous industrial sectors

Based on the indicators, how you do know?

Based on what you know about the business cycle, how would you describe the health of the U.S. economy from 1929-1942?

You will now analyze three additional historical case studies about the economies of different countries during the 1990’s and 2000’s.

You will be given a set of puzzle pieces consisting of primary source photographs and graphs of key economic indicators.

You will examine and match your puzzle pieces for each of the three economies. You will then use the information in the puzzle pieces to evaluate the health of these economies.

Step 1: Read the description of each economy. Take notes about any details that provide clues about these indicators:› GDP› Unemployment rate› Inflation rate

Step 2: Using the description of each economy and your clues, complete the table with these symbols:

Use more than one symbol for an indicator if you think it changes during the time period described.

Step 3: Match up the puzzle pieces. Record your decisions & reasons on the table on your worksheet.› Look at your 3 GDP tables. Using the data,

find the table that matches the clues in each description.

› Using the clues in your description AND what you learn about GDP from the table, find the unemployment rate and inflation rate graphs for each economy. Place them with the appropriate description and table.

› Choose which photo matches each economy, and place it with the appropriate description and graphs.