Topic 47 Population

Population -- equals people; people provide labor; 
	labor provides people with needs and wants.
Census -- an official count of all people, including their place of residence
	-Decennial Census -- a census taken every 10 years
Bureau of the Census -- established in 1902 to conduct the decennial census
	- “short form” -- a small survey given to 5 out of 6 homes.
	- “long form” -- given to the remaining household to generate a more detailed
			 profile of the 	population.
Urban population -- residents that live in incorporated villages or towns with 2,500 
		or more inhabitants.
Rural population -- makes up  the remainder of the total population, including the people
	 who live in sparsely populated areas along the fringes of the cities.
Population has been declining ever since the rate increase between 1790 and 1860.
Center of population -- the point where the country would balance if it could be laid 
		flat and all the people weighed the same
People interested in population trends (politicians, community leaders, businesses)
Demographers -- people who study growth, density, and characteristics of population.
Factors Affecting Growth (3)
	-Fertility Rate -- the number of births that 1,000 women are expected to 
			undergo in their lifetime.
	-Life Expectancy -- average remaining life span of people who reach a given age.
	-Net Immigration -- the net change in population caused by people moving 
		into and out of the country.
Baby Boom -- the high birthrate from 1946 to 1964
	-these people make up a sizable portion of the population.
Population Pyramid -- bar graph that shows the breakdown of population by age and sex.
	- the “baby boomers” create a large bulge in the pyramid.
Dependency Ratio -- a ratio based on the number of children and elderly for every 
	100 persons in the working-age bracket of 18 through 64.
	-Ratio will rise when the baby boomers retire and depend on younger generations.

Review -- What are the three factors that affect population growth?


Economic growth is measured two ways
	1. Real GDP (used for a short term - a period of one to five years)
	2. Real GDP per capita -- the dollar amount of real GDP produced for every
		person in the economy (used for the measurement of long term growth)

Growth Triangle -- a table that traces annual rates of growth for various periods of time.

Importance of Economic Growth
	1. Raises Standard of Living -- the quality of life based on the possession of
		 necessities and luxuries that  make life easier.
	2. Enlarged Tax Base -- the incomes and properties that may be taxed. 
		(Large revenue = better  public services.
	3. Solves Domestic Problems -- economic growth creates more jobs (solves
		 egrees of poverty, inadequate medical care, inequality of opportunity, 
		and economic insecurity.)
	4. Increases Foreign Trade -- helps create more jobs in those other countries
		.  Efficient allocation of Resources.

Factors Influencing Economic Growth (4) -- same as the factors of production.
	1. Land -- US has an abundance of natural resources available.
		-Renewable Resources -- resources that can be replenished.
	2. Capital -- increase in the supply of high-quality stock favors economic growth
		-Capital-to-Labor Ratio -- obtained by dividing total capital stock by the
		 number of workers in the labor force.
	3. Labor -- for economic growth to occur, one must have a skilled and 
		growing labor force.
	4. Entrepreneurs -- economy lags if entrepreneurs don’t take economic risks.

Labor Productivity -- the rate of growth of output per unit of labor input.

Negative Effects
	1. Declining labor with a high price level means that people are more willing to
		 buy cheaper foreign products than US ones.
	2. Jobs are cut and people are laid off.
	3. Time wasted retraining people who take new jobs.
Causes
	1. People are to lax in their work habits and don’t appreciate the company enough.
	2. Employers don’t care about their employees.
	3. Tax structure discourages companies from reinvesting earnings in new 
		capital and equipment.

Review -- Name the factors that influence growth?


Business Cycles -- the recurring ups and downs of real GDP. (Predictable)
Business Fluctuations -- the real GDP will go up and down from time to time. (Unpredictable)
Phases of the Business Cycle (2)
	1. Recession -- decline in the economy as measured by changes in the real GDP.
		-GDP must decline for two quarters, or six months.
		-Peak -- the point where real GDP stops going up.
		-Trough -- where the real GDP stops going down.
	2. Expansion -- a period of recovery from a recession. Continues until a new peak.
		Trend line -- growth path that economy would follow if it were 
		not interrupted by alternating periods of recession and recovery.
Depression -- a state of the economy with large numbers of people out of work, acute
		shortages, and excess capacity in manufacturing plants. (Severe recession)
“Great Depression”-- also called “Black Tuesday”.  October 29, 1929
“Bank Holiday” -- period of time during the depression where all of the banks closed 
	for a while. 
Depression Scrip -- money that was printed by towns, counties, chambers of commerce
	 and other civic bodies during the depression.


Causes of the Great Depression
	1. Disparity in the distribution of income
		-high income used the money inefficiently
		-low income didn’t have enough income to spend
	2. Easy and plentiful credit (too much borrowing)
	3. Economic conditions in the rest of the world
		-we had to withdraw the loans, which dropped our exports sharply
	4. American tariffs on imports from other countries.
Causes of Business Cycles (5)
	1. Charges in capital expenditures
	2. Inventory Adjustments (economic slowdown = cutback of inventories, build
			up later. GDP fluctuates.
	3. Innovation and Imitation (other companies must compete with 
			another company
	4. Monetary factors (credit and loan policies of the banking system).
	5. External Shocks (i.e.. increase in oil prices, wars, and international conflict)

Two methods of Predicting Business Cycles
	1. Econometric Model -- a macroeconomic model that uses algebraic equations
		to describe how the economy behaves.
		-Output-expenditure Model (GDP = C + I + G + F.)
	2. Index of Leading Indicators -- composite index of 11 economic series 
		that move up and down in advance of changes in the overall economy
		 (statistical series used to predict business cycle turning points).  
		Helps predict short run.

Review --- What are the two phases of business cycles?