TEKS 113.31(d)(9), Social Studies (Economics)
Subject: Economics – High School
TEKS 113.31(d)(9)
Summary of TEKS 113.31(d)(9)
TEKS 113.31(d)(9) explains how to interpret economic data like unemployment, GDP, and inflation to understand the health of the economy. It also teaches how to analyze business cycles, which show the ups and downs of economic activity. These tools help us see how changes in the economy affect individuals, businesses, and governments.
Key Concepts of TEKS 113.31(d)(9)
- Unemployment Rate: Measures how many people can’t find jobs.
- GDP: Shows the total value of goods and services produced in a country.
- GDP Per Capita: Measures the average wealth of people in a country.
- Inflation Rate: Tracks how prices rise over time.
- Business Cycles: Explain the economy’s periods of growth (expansion), decline (recession), and recovery.
Section 1: How Do We Measure the Economy?
TEKS 113.31(d)(9)(A)
Explanation: Economists use specific measurements to track the health of the economy. Let’s look at four key indicators and what they mean:
1. Unemployment Rate
- What It Is: The percentage of people who want to work but can’t find jobs.
- Why It Matters: High unemployment means fewer people have money to spend, which hurts businesses. Low unemployment means more people are earning money and spending it.
- Example: If the unemployment rate is 5%, it means 5 out of every 100 people in the workforce are jobless.
2. Gross Domestic Product (GDP)
- What It Is: The total value of all goods and services produced in a country during a specific time.
- Why It Matters: GDP shows how much a country produces and how strong its economy is.
- Example: If the U.S. GDP is $25 trillion, that’s the value of everything the country produced in one year.
3. GDP Per Capita
- What It Is: GDP divided by the population. This measures the average wealth per person.
- Why It Matters: A higher GDP per capita means people, on average, are wealthier.
- Example: If a country’s GDP is $2 trillion and its population is 100 million, the GDP per capita is $20,000.
4. Inflation Rate
- What It Is: The percentage increase in prices over time.
- Why It Matters: High inflation makes things more expensive, while low inflation or deflation can slow the economy.
- Example: If inflation is 3%, prices are rising by 3% per year.
Key Idea: These measurements help us understand how the economy affects people’s jobs, wealth, and cost of living.
Section 2: What Are Business Cycles and How Do We Analyze Them?
TEKS 113.31(d)(9)(B)
Explanation: A business cycle shows how the economy grows and shrinks over time. It has four stages:
1. Expansion
- The economy grows, unemployment drops, and businesses produce more goods.
- Example: During expansion, people spend more money, and businesses hire more workers.
2. Peak
- The economy reaches its highest point. Growth slows, but unemployment is still low.
- Example: At the peak, businesses are operating at full capacity, but prices might start rising too quickly.
3. Contraction (Recession)
- The economy shrinks, unemployment rises, and businesses cut back on production.
- Example: During a recession, fewer people spend money, which hurts businesses and slows the economy.
4. Trough
- The economy hits its lowest point before starting to grow again.
- Example: During the trough, unemployment is high, but it marks the beginning of recovery.
Key Economic Indicators for Business Cycles
- Unemployment Rate: Rises during recessions and falls during expansions.
- GDP: Grows during expansions and shrinks during recessions.
- Inflation: Can spike during peaks and drop during recessions.
Key Idea: Business cycles help us understand how economies move through periods of growth and decline.