Economics is often called the "science of decision making." The decisions that economists analyze range from personal decisions such as how big a pizza to order or whether to buy or lease a new car to the decisions the federal government makes about things like the size of our military. Economists use information about these, and other decisions, to develop indicators that can be used to determine the health of our economy. Just as a physician relies on indicators such as temperature, blood pressure and heart rate to determine the health of a patient, economists use indicators like gross domestic product growth, the unemployment rate and the rate of inflation to predict our nation’s economic health.
Introduction
Economics is often called the "science of decision making." The decisions that economists analyze range from personal decisions such as how big a pizza to order or whether to buy or lease a new car to the decisions the federal government makes about things like the size of our military. Economists use information about these, and other decisions, to develop indicators that can be used to determine the health of our economy. Just as a physician relies on indicators such as temperature, blood pressure and heart rate to determine the health of a patient, economists use indicators like gross domestic product growth, the unemployment rate and the rate of inflation to predict our nation’s economic health.
How do economists make their forecasts about the United States economy? In this lesson you will use the Web to retrieve up-to-date key economic statistics which will provide valuable hints about the state of the future economy. When the lesson is complete, you will have a new or better understanding of how economists predict our economic future
Learning Objectives
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Make certain they can explain the three leading economic indicators: GDP, inflation rate, unemployment rate.
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Gather data on the current state of the three leading economic indicators for the United States economy.
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Prepare a report for their client that includes:
– at least one graph/chart for each of the three indicators.
– a brief explanation of the status of that indicator.
– a prediction for the health of the United States economy over the next 12 months.
Resource List
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A Pedestrian's Guide to the Economy: This site provides answers to many of the most asked, a few of the least asked, and some of the never asked questions about the economy.
www.amosweb.com/cgi-bin/awb_nav.pl
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Current Key Economic Indicators: This Econ Ed Link page provides economic indicators for visitors' use.
Current Key Economic Indicators
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USA Today: Money: This site is USA Today's homepage for money and economic news.
https://www.usatoday.com/money/
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USA Today Economic Survey: This site provides an economic survey on GDP from 2004-2006.
https://usatoday30.usatoday.com/money/economy/econ0051.htm
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WebQuest: This site allows the user to find, create, and share a number of WebQuests.
webquest.org/index.php
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Economics WebQuest: This site provides an economics WebQuest lesson on how economists make their forecasts about the U.S. economy.
www.edci.purdue.edu/vanfossen/519webquest.html
Process
Use the following links to resources that may help you and your AEF partners prepare your report to your client:
In order to complete your client's report, you will need to complete the following tasks:
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Briefly (one-two sentences) describe each of the three leading economic indicators: GNP, inflation rate, and unemployment rate. Include a description of the impact of each indicator on the nation's economic health.
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Briefly describe the trends in each indicator over the past 12 months (e.g., is GNP up? By how much?).
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Print out a graph/chart for each indicator that shows the trend of that indicator over the last 12 months. (Record the URL, too.)
- Compile these pieces into a coherent recommendation to Ms. Jones. Should she bring her guava jelly business to the United States? What is the outlook for the economic health of the nation?
Send your recommendation to EconEdLink and have it posted on this page.
Assessment
Evaluating the accuracy of your forecast will take time. Over the next few months, various predictions about the future health of our economy will emerge. Often economists are surveyed to determine their beliefs. Here is an example of such a survey, https://usatoday30.usatoday.com/money/economy/econ0051.htm . Watch the newspaper and listen to financial news reports to compare your firm's forecast with that of professional forecasters. Were you right in your advice to Ms. Jones?
Based on the popular "WebQuest" WWW activity format developed by Bernie Dodge. For more information on WebQuests, see