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Economics in Movies

Indiana Jones & The Temple of Doom

Indiana Jones & The Temple of Doom:

$28 million dollar budget

Released: May 23, 1984

Movie Statistics

$25,337,110 weekend box-office receipts

Supply & Demand

Supply and demand is highlighted within this movie.

What principle?

Supply and demand is the relationship between the availability of a particular product and the desire (or demand) for that product has on its price.

Generally, low supply and high demand increase price and vice versa.

Movie Clip

How is it this principle?

What is happening?

SUPPLY AND DEMAND

Indiana Jones has the artifact that they want, but they tried using force to obtain it. Jones plays the same game, and then negotiates for a diamond. However, it does not work out because after the deal is made he drinks poison.

1984: Q1

GDP: 978,200,000,000

Federal Funds Rate: 9.91%

Labor Force Participation: 61.5%

Prime Rate: 11.50%

Discount Rate: 8.50%

Economy the Quarter Before

Real Interest Rate: 11.94%

Unemployment Rate: 7.8%

Q1 Operations:

Open Market Operations

The FOMC purchased $650 million in securities.

Loanable Funds: Q1

Loanable Funds Graph

Money Market: Q1

Money Market Graph

L-R Macro Graph: Q1

L-R Macro Equilibrium Graph

1984 Q2:

GDP: 1,003,750,000,000

Prime Rate: 13%

Unemployment Rate: 7.4%

Economy Next Quarter

Real Interest Rate: 13.20%

Labor Force Participation Rate: 62.1%

Federal Funds Rate: 11.06%

Discount Rate: 9%

Q2 Operations:

The FOMC purchased $1 Billion in securities within the quarter.

Open Market Operations

Loanable Funds: Q2

Loanable Funds Graph

Money Market: Q2

Money Market Graph

L-R Macro Graph: Q2

L-R Macro Equilibrium Graph

Explanation

The second quarter shows an increasing inflationary gap. The price level increased from 4.19% to 4.56%, and a GDP that increased. The economy experienced an increase in aggregate demand, and the interest rate rose due to an increase in open market operations within the quarter.

Did the movie impact the economy?

Conclusion

In 1984, the US rebounded into one of the greatest periods of economic growth since WWII. I do believe that the entertainment industry impacted this slightly. Due to the huge box office sales, it caused an increase in consumer spending which shifted Aggregate Demand.

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