ECONOMICS

(Grade 10)

Teacher: Mary Joy C. Juntarciego

 Objectives

• Define economic growth

• Measure economic growth using
Nominal GDP
• Explain the business cycle
 ECONOMIC GROWTH
• Annual increase in the level
of national output / annual
percentage change – GDP

• In theory, any positive

changes in components of
GDP can cause economic
growth
• Increases long term
GDP
- measures the
monetary value of
goods and services
produced within a https://edecon.wordpress.com/2010/05/22/the-production-possibility-frontier/

productive capacity of the country for a given

period of time (one
economy
year)
 HOW TO MEASURE ECONOMIC GROWTH

1. Real GDP

(value of national income – GDP, that is adjusted for inflation)

Nominal GDP

2. GDP per head / GDP per capita

- measurement of
economic output (GDP of a country divided by population size)
that doesn't adjust - key measure of country’s economic growth and standards of
for inflation living

(ceteris paribus, larger population = lower GDP per head)

 HOW TO MEASURE ECONOMIC GROWTH
- Components:

1. Consumption expenditure (C)

- total spending by households and individuals

2. Investment expenditure (I)

- capital spending of firms to increase production and expanding
economy’s productive capacity

3. Government spending (G)

- total consumption and investment expenditure of government
- spending with corresponding outputs
FORMULA:
4. Export earnings (X)
- monetary value of all exports sold to foreign buyers
GDP = C + I + G + (X – M)
5. Imports expenditure (M)
- monetary value of all payments for imports

Net exports = X - M
 Short Exercises (10 minutes)
FORMULA:
Compute for the GDP:
GDP = C + I + G + (X – M)
1. G = 100,000,000
I = 85,000,000 Consumption expenditure (C)
Investment expenditure (I)
C = 210,458,000
Government spending (G)
X = 45,679,025 Export earnings (X)
M =36,899,667 Imports expenditure (M)

2. A country’s total investment expenses totaled 56,880,365 while

looking at its household consumption amounting to 12,894,000. There was
also a huge amount of money spent by the government for various
projects amounting to 278,990,233. In addition, purchases from other
countries reach a total of 67,888,421 while our income from our products
abroad reached 78,889,312.
 Short Exercises (10 minutes)
1. 100,000,000 + 85,000,000 + 210,458,000 + (45,679,025 - 36,899,667)

= 395,458,000 + 8,779,358

= 404,237,358

2. 12,894,000 + 56,880,365 + 278,990,233 + (78,889,312 - 67,888,421)

= 348,764,598 + 11,000,891

= 359, 765, 489

 A graph that shows us the overall
economic performance of a country
BUSINESS CYCLE
• Visualization of economic conditions
• Graph that shows how the economy is
performing in meeting the macroeconomic aims
• Describes fluctuations in economic activity of a
country of a period of time
• Shows long-term economic trend of economic
growth
DEPRESSION : SEVERE and PROLONGED RECESSION
GDP DECLINE in more than 2 consecutive quarters
 ECONOMIC POLICIES:
How to address the FISCAL
problem? MONETARY
SUPPLY SIDE