Summary

Clayton Antitrust Act

Competition and Market Structures (pages 163-171) Perfect competition is a market structure with a large numbers of buyers and sellers, identical economic products, independent action by buyers and sellers, reasonably well-informed participants, and freedom for firms to enter or leave the market. Perfect competition is a largely theoretical situation used as a benchmark to evaluate other market structures. Market situations lacking one or more of these conditions are called imperfect...

At the Border

Your stomach starts growling and you want a quick fix, so you head to the nearest Gold Arches for a Big Mac and . . . rice Rice is what you'll probably end up with these days if your local McDonald's is in Indonesia. With the collapse of the Indonesian currency, the rupiah, in 1998, potatoes, the only ingredient McDonald's imports to the island nation, have quintupled in price. That means rice is turning with an increasing frequency as an alternative to the french fry. In September 1998...

Agricultural Price Support Programs

O CCC Loan Program CCC Deficiency Payments The farmer is paid the difference between the target j and the market price. Using Graphs The farmer sells surplus crops to the government under the plan shown in Panel A. The farmer receives a payment equal to the difference between the target price and the prices the farmer received for the crops. What was the total payment the farmer received under the loan program Under the deficiency payment program check sent to producers that makes up the...

Change in Supply

Using Tables and Graphs A change in supply means that a different quantity is supplied at every price. What does a shift of the supply curve to the right show Expectations about the future price of a product can also affect the supply curve. If producers think the price of their product will go up, they may withhold some of the supply. This causes supply to decrease and the supply curve to shift to the left. On the other hand, producers may expect lower prices for their output in the future. In...

What Is Supply

For almost any good or service, the higher the price, the larger the quantity that will be offered for sale. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by describing how supply differs from demand. supply, Law of Supply, supply schedule, supply curve, market supply curve, quantity supplied, change in quantity supplied, change in supply, subsidy, supply elasticity After studying this section, you will be able to 1. Understand the difference...

The Price System at Work

Changes in demand and supply cause prices to change. Reading Strategy Graphic Organizer As you read the section, complete a graphic organizer similar to this, showing how a surplus and shortage affect prices, demand, and supply. economic model, market equilibrium, surplus, shortage, equilibrium price After studying this section, you will be able to 1. Understand how prices are determined in competitive markets. 2. Explain how economic models can be used to predict and explain price changes. 3....

Deficits Surpluses and The National Debt

Deficit spending has helped create a national debt. Reading Strategy Graphic Organizer As you read the section, describe the growth of the debt before and after 1970. deficit spending, federal debt, balanced budget, trust fund, crowding-out effect, pay-as-you-go provision, line-item veto, spending cap, entitlement After studying this section, you will be able to 1. Explain how the federal deficit is related to the federal debt. 2. Relate the impact of the federal debt on the economy. 3....

The Federal Reserve System

Role The Federal Reserve System

The Federal Reserve works to strengthen and stabilize the nation's monetary system. Graphic Organizer As you read this section, complete a graphic organizer similar to the one below by listing the components that make up the Federal Reserve System. member bank, bank holding company, Regulation Z, currency, coins After studying this section, you will be able to 1. Describe the structure of the Federal Reserve System. 2. Explain the major regulatory responsibilities of the Fed. Truth-in-Lending...

Good News

Economic Concepts

Taxes, as the saying goes, may be as unavoidable as death, but do they have to be so high . . . In recent years, federal individual income and payroll taxes have been claiming an ever larger share of personal income. . . . As some critics see it, this growing tax bite is squeezing consumers. With more income being siphoned off by taxes, they say, struggling households have had to dip into savings simply to maintain consumption patterns. And the fact that the monthly savings rate recently turned...

Short Run Impact of Monetary Policy

Using Graphs In the short run, monetary policy impacts interest rates, or the price of credit. When the money supply expands, the price of credit goes down. When the money supply contracts, the price of credit goes up. Why is the supply curve of money, SS, shown as a vertical line expansion of the money supply, making inflation worse. Much of the federal debt was monetized from the late 1960s until the late 1970s. During this period, the money supply grew at rates of 12 percent or more for...

Current Tax Issues

The consequence of tax reform was to make the individual tax code more complex than ever. Graphic Organizer As you read the section, complete a graphic organizer like the one below by listing the advantages and the disadvantages of the flat tax. Include a definition of flat tax in your own words. accelerated depreciation, investment tax credit, surcharge, alternative minimum tax, capital gains, value-added tax (VAT), flat tax After studying this section, you will be able to 1. 2. Describe the...

Individual and Market Supply Curves

. . . to get the X Market Supply Curve. f . . . to the second V supply curve . . . Using Graphs The market supply curve, SS, is the sum of all individual supply curves in the market. Why are the supply curves upward sloping MR The quantity supplied is the amount that pro-JVA ducers bring to market at any given price. A change in quantity supplied is the change in amount offered for sale in response to a change in price. In Figure 5.1, for example, four CDs are supplied when the price is 15. If...

The Role of Government

One of the economic functions of government in a market economy is to maintain competition. Graphic Organizer As you read the section, give three reasons government takes part in economic affairs. Complete an organizer similar to the one below to help you organize your answer. trust, price discrimination, cease and desist order, public disclosure After studying this section, you will be able to 1. Discuss major antitrust legislation in the United States. 2. Understand the need for limited...

Janet Yellen

Janet Yellen

Janet Yellen, former Chair of the President's Council of Economic Advisers (CEA), has a knack for explaining things. When she was a student pursuing her Ph.D. in economics in the early 1970s, the lecture notes she took became a legend in their own time. The Yellen Notes, as they were known, were passed around and became the unofficial textbook for several generations of graduate students. As a member of the Board of Governors of the Federal Reserve, she frequently briefed the White House on...

The Gains From Trade

-After specialization Before specialization -After specialization Before specialization of production 8 cashews 40 coffee, or 1 cashew 5 coffee. of production 8 cashews 40 coffee, or 1 cashew 5 coffee. Coffee 20 + 5 25 Cashews 4 + 1 5 Coffee 40 + 0 40 Cashews 0 + 6 6 (Coffee and nuts measured in pounds) (Coffee and nuts measured in pounds) Using Graphs If Alpha and Beta each specializes in the product it can produce relatively more efficiently, total output for both countries goes up. After...

Is a Penny Saved

It is possible to have more money than you need. As billionaire H.L. Hunt said in the '70's For practical purposes, someone who has 200,000 a year is as well off as I am. So why do the rich continue to pile up wealth High-income households save more than either of two standard economic models would predict, says Johns Hopkins University economist Christopher D. Carroll. Contrary to the life-cycle model, the rich save far more than they need to support themselves in old age. And the dynastic...

Math Practice

World Trade Imbalances Chart

According to Keynesian economics, what action should government take if business investment fell by 20 billion Show your findings using the output-expenditure model Applying the Writing Process Go to a library to look up advertisements for airfares from 19 years ago. Find out what the current airfares are when traveling to the same locations. Write an essay that explains the effect these price changes may have had on consumers. What might they have to do with the deregulation of the airline...

Dynamics of the Price Adjustment Process

Dynamics The Price Adjustment Process

O At a price of 25, a surplus of ten causes the price to drop. At a price of 10, a shortage of seven causes the price to rise. At a price of 20, a surplus of six causes the price to drop again. Alternating surpluses and shortages cause equilibrium to be reached. Using Graphs In a competitive market, prices are drawn toward equilibrium as a result of the constant pressures from temporary surpluses and shortages. Panel A shows that a price of 25 will create a surplus. A surplus is also created on...

Monetary Policies

Both demand-side economics and supply-side economics are concerned with stimulating production and employment. Neither policy assigns much importance to the money supply. A doctrine called monetarism, however, places primary importance on the role of money and its growth. Monetarists believe that fluctuations in the money supply can be a destabilizing element that leads to unemployment and inflation. Because of this, they favor policies that lead to stable, long-term monetary growth at levels...

Who Benefits

Katerina Simons

Although the number of commercial banks in the U.S. fell from 13,123 in 1988 to 9,215 in 1997, there's still no end in sight to the banking industry's rapid consolidation. But is the merger wave beneficial to consumers Advocates claim that mergers produce efficiencies that lower costs and thus permit better service to customers. Skeptics worry that mergers allow banks to cut services because they now face less competition. A recent study by Katerina Simons and Joanna Stavins of the Federal...

Model of the CD Market

O Market Demand and Supply Schedules In a competitive market, the adjustment process moves toward market equilibrium-a situation in which prices are relatively stable, and the quantity of goods or services supplied is equal to the quantity demanded. In Figure 6.1, equilibrium is reached when the price is 15 and the quantity supplied is six units. How does the market find this equilibrium on its own Why did the market settle at 15, rather than 20, or 10, or at some other price To answer these...

Federal Government Expenditures

The federal government's budget supplies money for many services and programs. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below that describes the different types of government spending. federal budget, mandatory spending, discretionary spending, fiscal year, federal budget surplus, federal budget deficit, appropriations bill, medicaid After studying this section, you will be able to 1. Explain how the federal budget is established. 2. Describe...

Demand Side Policies

Keynesian Demand Side Economics

MM Demand-side policies are federal policies M K t designed to increase or decrease total demand in the economy by shifting the aggregate demand curve to the right or to the left. One approach is known as fiscal policy the federal government's attempt to stabilize the economy through taxing and government spending. CHAPTER 16 ACHIEVING ECONOMIC STABILITY 447 According to Keynesian economics, economic activity will be stimulated if the federal government invests in projects such as hydroelectric...

Economics

High School Graduate & Equivalency Source U.S. Department of Commerce, Bureau of the Census, 1999 Using Tables Education is one way to invest in human capital. How does this type of investment pay off for both employers and their employees Visit epp.glencoe.com and click on Textbook Updates Chapter 1 for an update of the data. Visit epp.glencoe.com and click on Textbook Updates Chapter 1 for an update of the data. 16 UNIT 1 FUNDAMENTAL ECONOMIC CONCEPTS First and Biggest The world's first...

Did you know

The EPA started its program by issuing sulfur dioxide pollution permits-federal permits allowing public utilities to release pollutants into the air-in 1993. Utilities are not allowed to operate without them, but if a utility has more permits than it needs, it can sell them in one-ton increments. Thus, utilities that want to spend money on emissions cleanup could sell their permits, and use the cash to clean up their emissions. Those who prefer to purchase and use the permits can do so. The...

Scarcity

Scarce Economics

There Is No Such Thing as a Free Lunch Because resources are limited, virtually everything we do has a cost-even when it seems as if we are getting something for free. For example, you may think you are getting a free lunch when you use a buy one, get one free coupon. However, while you may not pay for the extra lunch then and there, someone had to pay the farmer for raising the food, the truck driver for delivering the food, the chef for preparing the food, and the server for serving the food....

Basic Economic Concepts

Basic Economic Concepts

An economic product is a good or service that is useful, relatively scarce, and exchangeable. Graphic Organizer As you read the section, describe three different transactions that could take place in the factor market. Use a web like the one below to help you organize your answer. economic product, good, consumer good, capital good, service, value, paradox of value, utility, wealth, market, factor market, product market, economic growth, productivity, division of labor, specialization, human...

Job Market

During the next decade, barring a change in government policy, nearly a million immigrants are expected to arrive in the U.S. every year. Most, both legal and illegal, will continue to come from Latin America and Southeast Asia, but every foreign land will be represented. So will every level of skill, education, and talent New arrivals will make up hotel beds, start their own shops, and pursue pathbreaking medical research. And they'll play a critical role in providing the workers needed to...

Federal Regulatory Agencies

Food and Drug Administration (FDA), 1906 Enforces Laws to ensure purity, effectiveness, and truthful Labeling of food, drugs, and cosmetics inspects production and shipment of these products Federal Trade Commission (FTC), 1914 Administers antitrust laws forbidding unfair competition, price fixing, and other deceptive practices Federal Communications Commission (FCC), 1934 Licenses and regulates radio and television stations and regulates interstate telephone, telegraph rates and services...

State and Local Tax Systems

State and local governments each rely on different revenue sources. Graphic Organizer As you read the section, complete a graphic organizer like the one below by describing why sales taxes are effective ways to raise revenue. intergovernmental revenue, property tax, tax assessor, payroll withholding statement After studying this section, you will be able to 1. Explain how state governments collect taxes and other revenues. 2. Differentiate between state and local revenue systems. 3. Interpret...

Using Factors of Production

Rancocas Valley Regional High School One of the principle goals of an economic system is efficiency. How do we achieve efficiency in production One key is operational innovation. This includes improving the methods of organizing production in order to reduce costs, improve quality, and meet the demands of the customers. In this workshop, you will experiment with a process that you design to produce paper baskets. You will produce as many baskets as you can, decorated as attractively as...

Tax Table for Single Individuals

If the amount on Form 1040, line 39, is over. Source Schedule X, IRS Individual Tax Table similar for married individuals, with rates scaled so that couples earning higher incomes pay a larger percentage of their income in taxes. When a tax is progressive, the average tax rate goes up when income goes up. Figure 9.6 illustrates this point. The single individual with 10,000 of taxable income pays an average of 15 cents for every dollar earned. If the person has 35,000 of taxable income, the...

The Rate of Inflation

Economic Recession 1985

Source Bureau of Economic Analysis, United States Department of Commerce Using Graphs Inflation tends to increase at the end of expansions, and tends to decrease during periods of recession. How would you characterize the inflation rate during the period from 1990 to 2000 Visit epp.glencoe.com and click on Textbook Updates Chapter 14 for an update of the data. everything multiplied by 100 to convert the decimal to a percent) change in price level beginning price level Figure 14.5 shows the rate...

How Big Is the Public Debt

A 1 bill is about 6 inches (15.2cm) long. If 4 trillion of these bills were laid end to end, they would form a chain 378.8 million miles (611.0 km) long more than enough to stretch from the surface of the earth to the surface of the sun and back twice Or, suppose you had 4 trillion. If each 1 bill were counted 24 hours a day at the rate of one per second, it would take more than 126,800 years to count them all. At an average life expectancy of 70 years, that is about 1,812 lifetimes Or, suppose...

Supply Side Policies and the Aggregate Supply Curve

Believe that if taxes are too high, people will not want to work, and businesses will produce less. Lower tax rates, they argue, allow individuals and businesses to keep more of the money they earn, which encourages them to work harder. This would give workers more money to spend in the long run. Government would also gain as total tax collections go up because of the extra activity. In the 1980s, somewhat optimistic supply-siders even argued that lower tax rates would stimulate the economy so...

Identify Several Complexities Of Central Planning

Kiev to Pay Russian Debts with Bombers Russia has agreed to accept bomber aircraft as payment for part of Ukraine's huge debt to Russia for natural gas Ukraine Really pays for gas in bart --inal prices set at around three times the ma ce for the goods . . . but Ukraine and Russia aie stantlv at loggerheads over gas debts. Zl in the past has shut off gas supplie, m Uk ne due to nLpayment but Ukraine has hen Ti Rusj gas bound for Europe instep AH of Russia's gas exports to Europe travel thiough...

Global Branding

Give Some Economic Benefits Unions

It's a sunny afternoon outside Parkson's department store in Shanghai, and a marketing battle is raging for the attention of Chinese women. Tall, pouty models in beige skirts and sheer tops pass out flyers promoting Revlon's new spring colors. But their efforts are being drowned out by L'Or al's eye-catching show for its Maybelline brand. To a pulsating rhythm, two gangly models in shimmering lycra tops dance on a podium before a large backdrop depicting the New York City skyline. The music...

Barriers to International Trade

Tariffs and quotas are two restrictions on international trade. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by describing the differences between a tariff and a quota. tariff, quota, protective tariff, revenue tariff, dumping, protectionists, free traders, infant industries argument, balance of payments, most favored nation clause, World Trade Organization (WTO), North American Free Trade Agreement (NAFTA) After studying this section, you...

An Iou That You Draft And Give To A Friend

Economics Concepts

Many people think of Boston as the birthplace of democracy in our country. They may not realize that it is also the birthplace of the democ- r76 that three stock salesmen created the faist muu W nd opened up what was once an exclusive nf the affluent to iust about everyone. to utZnsJs investors Trust made its debut in March 1924, it had 50,000 in assets and cieDui ii nooline investments, the St wl et. . . (the) true innovation was rig investors to redeem shares upon request, at market value of...

Whiz Kids

South Korean Economic Development

Some of the most prominent chief executives, presidents, entrepreneurs, and inventors in the world are graduates of IIT, India's elite institution of higher learning. Its impossibly high standards, compelling the mostly male student body to average fewer than five hours of sleep a night, produce numerous graduates who are masters at problem-solving. . . . The rise of IITians, as they are known, is a telling example of how global capitalism works today. The best companies draw from around the...

Edward T Lewis

As chairman and CEO of Essence Communications, Inc. (ECI), Edward T. Lewis heads one of the largest African American businesses in the United States. His struggle to make Essence magazine a success shows determination and entrepreneurial skill. In the late 1960s, Lewis, then a financial analyst for a bank, attended a conference held to encourage initiative in African American capitalism. One idea captured him that someone could publish a magazine targeted at African American women. Lewis...

Economic Growth

The ability of an economy to produce output determines its growth. Graphic Organizer As you read the section, complete a graphic organizer like the one below by explaining how saving influences economic growth. real GDP per capita, growth triangle, standard of living, tax base, renewable resources, capital-to-labor ratio, labor productivity After studying this section, you will be able to 1. Describe how economists measure the growth of the United States economy. 2. Explain the importance of...

The Economics of Taxation

Ability Pay Principle

Taxes are the single most important way of raising revenue for the government. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by listing the criteria for taxes to be effective. Then, define each of the criteria in your own words. sin tax, incidence of a tax, tax loophole, individual income tax, sales tax, benefit principle of taxation, ability-to-pay principle of taxation, proportional tax, average tax rate, progressive tax, marginal tax rate,...

Cover Story

Keith Clinkscales realizes that he must pinpoint what his readers want if his new magazine, Bla e, is to succeed. Blaze is a rap music and fashion. As reported in USA Today, Clinkscales watches the comings and goings of teenagers at nearby Norman Thomas High School. He studies their clothes, hairstyles Clinkscales 34, notes, It's amazing to watch music. . . Clinkscales, them and observe the passion mey music and fashion and overall lifestyle . The magazine targets readers ages 12 to. A mp...

Poverty in the United States Total Number and Rate

cf < > < > < > Using Graphs The dividing line between those officially considered poor and those not officially considered poor is the poverty line. Was the percentage of the population below the poverty line greater in the 1990s than in the 1980s Visit epp.glencoe.com and click on Textbook Updates Chapter 14 for an update of the data. Programs that assist poor people but do not provide direct cash assistance fall into the category of general assistance. One example is the food...

Economic Incentives and Resources

Epa Inspector

Incentives help preserve scarce resources. Reading Strategy Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by providing examples of ways to curtail the incentive to pollute. Methods to curtail the incentive to pollute Methods to curtail the incentive to pollute glut, pollution, acid rain, pollution permit Objectives After studying this section, you will be able to 1. Explain how the price system helps conserve water, natural gas, and oil. 2....

The Global Demand for Resources

Global Map Where Wind Energy Used

Worldwide economic challenges include overpopulation, food shortages, resource depletion, and environmental pollution. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by explaining the difference between renewable and nonrenewable energy resources and providing two examples of each. subsistence, nonrenewable resources, embargo, gasohol, aquifer After studying this section, you will be able to 1. Explain Malthus's views on population growth. 2....

The Rise and Fall of Communism

Five-Year Plan, collectivization, Gosplan, state farm, collective farm, piecework, storming, perestroika After studying this section, you will be able to 1. Explain the rise of the Soviet economy under Lenin and Stalin. 2. Describe the complexities of a centrally planned economy. 3. Understand the forces that brought about the collapse of communism as an economic system. Perestroika Have you ever thought that some aspects of the economy should be changed from top to bottom If so, read to find...

Thinking Critically

Understanding Cause and Effect What are the effects of the Federal Reserve instituting an easy money policy Complete a graphic organizer similar to the one below to answer to the question. 1. Understanding Cause and Effect What are the effects of the Federal Reserve instituting an easy money policy Complete a graphic organizer similar to the one below to answer to the question.

The Economics of Government Spending

The role of the federal government has grown, making it a vital player in the economy. Graphic Organizer As you read the section, complete a graphic organizer similar to this one by listing reasons for the increase in government spending since the 1940s. per capita, public sector, private sector, transfer payment, grant-in-aid, distribution of income After studying this section, you will be able to 1. Explain why and how government expenditures have grown since the 1940s. 2. Describe two kinds...

Government Spending as a Percent of Total Output 2000

Total Government Spending in the U.S. 29 Spending From State and Local Revenues 9 Spending for Direct Federal Programs 17 Federal Grants to State and Local Governments 3 Source A Citizen's Guide to the Federal Budget, FY 2000 Using Graphs The circle graph shows that all levels of government combined account for about 29 percent nearly one-third of the nation's total output. The bar graph shows that federal spending accounts for two-thirds of all government spending, or 20 percent of the total...

Identify Three Forces That Are Likely To Cause Future Revision Of The Tax Code

Loggers fell trees and sell the timber to the mills for processing. The mills cut the timber into blanks that will be used to make bats. Bat manufacturers shape, paint, or varnish the bats and sell them to wholesalers. The wholesalers sell the bats to retail outlets where consumers can buy them. The retailers put the bats on the shelves and wait for the consumers. Using Tables The VAT is like a national sales tax added to each stage of production. As a result, it is built into the final price...

The Crowding Out Effect Caused by Federal Spending

Using Graphs Crowding out affects the allocation of resources in the economy. What happens to the interest rate when deficit spending increases (BEA) in 1990. The BEA's main feature is a pay-as-you-go provision-a requirement that new spending proposals or tax cuts must be offset by reductions elsewhere. If no agreement on the reductions is reached, then automatic, across-the-board spending cuts are to be instituted. The BEA also has limitations. For one, it applies only to discretionary...

Prices as Signals

Graphic Organizer For Economic Systems

Competitive markets and prices are important to capitalism. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by providing examples from your own experience that show how the price system provides for freedom of choice. price, rationing, ration coupon, rebate Objectives After studying this section, you will be able to 1. Explain how prices act as signals. 2. Describe the advantages of using prices as a way to allocate economic products. 3....

Why Economists Differ

Wfi Choosing which economic policies will work best is difficult. The proposals economists offer often seem contradictory, which adds to the difficulty. These differences, however, are smaller than most people realize. Economists who choose one policy over another normally do so because they think that some problems are more critical than others. For example, one economist might think that unemployment is the crucial issue, while another believes that inflation is. if you were to survey all...

Describe Two Ways In Which Transition Economies Handled Privatization

Capitalism Market Reforms

Rubles From the Ruins A Russian Success NIZHNY NOVGOROD, Russia-In general, the RufsSfeinomy is a mess-. Industrial production is Russian econo y the transition to a market ployaient and poverty are ubiquitous. And yet, some Russian businesses are actually making money, some Although criminals and corrupt government officials frustrate entrepreneurs all over the country, some manage to evade or ignore them. The experiences of the few who are succeeding provide some powerful lessons in why that...

The Factors of Production

Land includes the gifts of nature, or natural resources not created by human effort. Capital includes the tools, equipment, and factories used in production. Labor includes people with all their efforts and abilities. individuals who start a new business or bring a product to market. Synthesizing Information The four factors of production are necessary for production to take place. What four factors of production are necessary to bring jewelry to consumers Capital is unique in that it is the...

Linda Alvarado

Linda Alvarado Construction Company Logo

There are still too many doors that need opening for women and f minorities, Linda Alvarado once said. There's no lack of talent or ambition out there-just a lack of opportunity for women and minorities to try. Alvarado knows all about talent and ambition-and the obstacles women and minorities face. She herself has become one of the most successful individuals in one of the most male-dominated industries in the country construction. As a young woman, Alvarado became intrigued by the...

Distorting Market Outcomes with Price Ceilings and Price Floors

In housing markets, a rent control is a price ceiling. In housing markets, a rent control is a price ceiling. In labor markets, the minimum wage is a price floor. In labor markets, the minimum wage is a price floor. Using Graphs Price ceilings and price floors prevent markets from reaching equilibrium, allowing the resulting shortages and surpluses to become permanent. Why does government sometimes impose price ceilings and floors on the market IjH One of the common ways of achieving social...

Clearing a Check

The process begins with Anna, who has a 100 demand deposit account (DDA) with Bank X. Anna writes a check for 5, which she gives to Nathan. At the same time, she records the amount in her checkbook to show a new balance of 95. (Note that only the accounts affected by the 5 check are shown in this figure.) District Federal Reserve System Bank Nathan, who banks at Bank Y, now has the check. If he decides to cash it, he will have 5 in currency in addition to his DDA of 100. If he decides to make a...

Assessment and Activities

Self-Check Quiz Visit the Economics Principles and Practices Web site at epp.glencoe.com and click on Chapter 10 Self-Check Quizzes to prepare for the chapter test. - Self-Check Quiz Visit the Economics Principles and Practices Web site at epp.glencoe.com and click on Chapter 10 Self-Check Quizzes to prepare for the chapter test. - Write a sentence about each pair of terms below. The sentences should show how the terms are related. 1. public sector, private sector 2. transfer payment,...

Online Bill Collector

Every year, American business sends out 29 billion bills. And by any measure, the exercise isn't much fun. For companies, printing, processing and posting a typical consumer bill runs about 90c. . . . But for banks trying to make it on the Internet, bills are cool. Bankers see bills as surefire eyeball-grabbers in an environment where it's tough to command consumer attention and a key to protecting their existing business managing cash for big companies. Increasingly, banks are battling...

Average Individual and FICA Taxes Single Individuals 2000

Fica Taxes Regressive

0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 S S> V & 6> .V . cS c cS cS cS c cr cS cS cS r oS> ( n< r < > ' aV .CS' CN n< T .< > < AV OS*1 nV < > < AV *' S S> V & 6> .V . Average FICA (Social Security & Medicare) Tax Using Graphs The individual income tax is a progressive tax, meaning that people with higher incomes pay a larger percentage of that income as taxes than do persons with lower income. Is the FICA tax a...

The Social Costs

Economic Costs Instability

The cost of instability can be measured in dollars rather easily, but it is harder to measure in terms of human suffering. In human terms, the costs are almost beyond comprehension. Because of these social costs, everyone agrees that stability must be achieved. Economists are interested not only in society's production, but in its mental and social health as well. Human suffering during periods of instability goes beyond not having more goods and services that raise the standard of living. The...

The Labor Movement

Labor unions are organizations that attempt to improve the working conditions of their members through joint action. Graphic Organizer As you read the section, compare how an industrial union differs from a trade union. Complete a graphic organizer similar to the one below by listing the differences. macroeconomics, civilian labor force, craft union, trade union, industrial union, strike, picket, boycott, lockout, company union, Great Depression, right-to-work law, independent union After...

Trade Craft and Industrial Unions

Printers' Electricians' Machinists' Carpenters' Plumbers' Union Using Charts How do trade unions differ from industrial unions entered the unions. Others were upset by the loss of production resulting from strikes. In 1946 alone, more than 116 million workdays were lost due to work stoppages. People began to feel that management, not labor, was the victim. Growing antiunion feelings led to the LaborManagement Relations Act, or Taft-Hartley Act, of 1947. The act puts limits on what unions can do...

Social Goals vs Market Efficiency

To achieve one or more of its social goals, government sometimes sets prices. Graphic Organizer As you read the section, complete a cause-and-effect chart similar to the one below by explaining how price ceilings affect quantity supplied. price ceiling, minimum wage, price floor, target price, nonrecourse loan, deficiency payment After studying this section, you will be able to 1. Describe the consequence of having a fixed price in a market. 2. Explain how loan supports and deficiency payments...

Employment Trends and Issues

Important employment issues include union decline, unequal pay, and the minimum wage. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below to explain why comparable worth is difficult to apply. giveback, two-tier wage system, glass ceiling, comparable worth, set-aside contract, part-time worker, minimum wage, current dollars, real or constant dollars, base year After studying this section, you will be able to 1. Explain why union membership has...

Using a Spreadsheet

People use electronic spreadsheets to manage numbers quickly and easily. Formulas may be used to add, subtract, multiply, and divide the numbers in the spreadsheet. If you make a change to one number, the totals are recalculated automatically for you. To understand how to use a spreadsheet, read the following descriptions of several spreadsheet calculations A spreadsheet is an electronic worksheet. It is made up of numbered cells that form rows and columns. Each column vertical is assigned a...

The GDP Gap and the Production Possibilities Frontier

Economic Production Quantity

Using Graphs The GDP gap is the difference between the actual production at point and the potential production as indicated by points bl or HI What happens to production when some resources are idle or are not employed efficiently One measure of the cost of stagnation is the GDP gap the difference between the actual GDP and the potential GDP that could be produced if all resources were fully employed. In other words, the gap is a type of opportunity cost a measure of output not produced because...

Oprah Winfrey

Oprah Winfrey Harpo Productions

Oprah Winfrey-known to millions simply as Oprah-is one of the richest and most powerful women in America. Most people know her as a talk show host, but she has other talents. As an actress, she received an Oscar nomination for Best Supporting Actress in The Color Purple. As a businessperson, she is the third woman in history after Mary Pickford and Lucille Ball to own a major television and film studio. With an annual income of about 100 million, she is poised to become the country's first...

Economics and Politics

Monetary policy is becoming more important because discretionary fiscal policy is difficult to implement. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by identifying and describing the different kinds of fiscal policy. Council of Economic Advisers Objectives After studying this section, you will be able to 1. Explain why monetary policy sometimes conflicts with other economic policies. 2. Recognize that economists have differing views. 3....

Major Components of the Money Supply

Other Checkable Deposits Demand Deposits Coins and Currency Retail Money Market Funds Small Denomination Time Deposits Savings Deposits Source The Federal Reserve System Statistical Release H.6, 1999 Using Graphs This figure shows the different components of the money supply that comprise M1 and the money supply components that have to be added to MI to get M2. What component makes up the largest part of the money supply deposits, and other checkable deposits such as NOW accounts and credit...

Annual Growth Rates of Real GDP Per Capita

gt krtfiAirtrtn 1 non inil iri33 f To find the annual f rate of growth during the 1980s, start with 1980 on the horizontal axis and read up to the -----1990 row. Source Economic Report of the President, various years Source Economic Report of the President, various years Visit epp.glencoe.com and click on Textbook Updates Chapter 13 for an update of the data. Using Charts Changes in real GDP can be overstated if we do not take population growth into account. To find the annual rate of growth...

The Federal Deficit

o Source Economic Report of the President and Budget of the United States Government, various years o Source Economic Report of the President and Budget of the United States Government, various years Using Graphs Deficits add to the federal debt, and interest on the federal debt is one of the largest categories of federal expenditures. What happened to the federal deficit during World War II Visit epp.glencoe.com and click on Textbook Updates Chapter 10 for an update of the data. could grow...

Macroeconomic Equilibrium

Aggregate supply is the total quantity of goods and services produced at different price levels. Aggregate demand is the total quantity purchased at different price levels. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by listing at least three factors that could lower production costs leading to an increase in aggregate supply. Effect Increase in aggregate supply Effect Increase in aggregate supply aggregate supply, aggregate supply curve,...

Restricting International Trade

Restricting International Trade

TM Historically, trade has been restricted in CM1 two major ways. One is through a tariff-a tax placed on imports to increase their price in the domestic market. The other is with a quota-a limit placed on the quantities of a product that can be imported. Governments levy two kinds of tariffs-protective and revenue. A protective tariff is a tariff high enough to protect less-efficient domestic industries. Suppose, for example, that it costs 1 to produce a mechanical pencil in the United...

Biweekly Paycheck and Withholding Statement

Weaver amp Higginson 210 Number 2,195,903 Attorneys at Law Five Hundred Eighty-Six Dollars and 89 100 PLEASE DETACH AND RETAIN THIS PORTION AS YOUR RECORD OF EARNINGS AND DEDUCTIONS Understanding Percentages The withholdingstatement attachedto yourpaycheck summarizesmanyof thefederal, state, and local taxes. Federal and state income tax with-holdingsarealwaysshown, asistheFICA SocialSecurity and medicare tax.Other withholdingsmayinclude cityincome taxes and voluntary deductions, such as health...

Csse Study

Although it may surprise many Americans, child labor is prevalent in many parts of the world today, especially in developing countries. The estimates vary, but perhaps 200 million children under the age of 12 work regularly instead of going to school. Sometimes, the children start to work as soon as they are able some of the youngest workers are just three years old. Should the United States take steps to end child labor Many people answer that question with a resounding Yes They hold that...

Explain How The Firm Obtains And Then Disposes Of Its Cash Flow

Self-Check Quiz Visit the Economics Principles and Practices Web site at epp.glencoe.com and click on Chapter 3 Self-Check Quizzes to prepare On a separate sheet of paper, classify each of the numbered terms below into the following categories some terms may apply to more than one category Corporations Nonprofit Organizations 9. limited partner 10. credit union 1. Explain the strengths of a sole proprietorship. 2. Identify the weaknesses of a partnership. 3. Explain the structure and strengths...

Business Growth and Expansion

Businesses grow through merging with other companies and by investing in the machinery, tools, and equipment used to produce goods and services. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by comparing a vertical merger to a horizontal merger. merger, income statement, net income, depreciation, cash flow, horizontal merger, vertical merger, conglomerate, multinational After studying this section, you will be able to 1. Explain how businesses...

The Spectrum of Economic Systems

Capitalism, socialism, and communism are historically three popular economic systems. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by listing six advantages of capitalism and providing an example of each. capitalism, socialism, communism Objectives After studying this section, you will be able to 1. Explain the advantages and disadvantages of capitalism. 2. Describe the differences among the doctrines of socialism, capitalism, and communism....

Summary of Monetary Policy Tools

Images 1920s Stock Margin Buying

Frees excess reserves because fewer are needed to back existing deposits in the system. More reserves are required to back existing deposits. Excess reserves contract. Checks written by the Fed add to excess reserves in the system. Checks written by buyers are subtracted from reserves. Excess reserves in the system contract. Additional reserves can be obtained at lower cost. Excess reserves expand. Additional reserves through borrowing are now more expensive. Excess reserves are not added....

Which Of The Two Principles Of Taxation Is More Equitable

As income goes up, the percent of income paid in taxes stays the same. 1,000 paid in taxes, or 10 of total income 25,000 paid in taxes, or 25 of total income As income goes up, the percent of income paid in taxes goes up. State Sales Tax 5,000 in food and clothing purchases, taxed at 4 for a total tax of 200 or 2 of income. As income goes, up the percent of income paid in taxes goes down. Using Tables Proportional, progressive, and regressive are the three main types of taxes. Under which type...

Supply Elasticity

Milton Hershey Family Farm

Change in Supply Due to Change in Price Change in Quantity Supplied Due to a Change in Price Using Graphs The elasticity of supply, like the elasticity of demand, is a measure of responsiveness. The key to elasticity is the way the dependent variable quantity supplied changes in response to a change in the independent variable price . What determines whether a business's supply curve is elastic or inelastic concept is demand elasticity. If quantities are being brought to market for sale, the...

Production Costs and Revenues

Using Tables The concepts of marginal product, marginal cost, and marginal revenue are central to economic analysis. Marginal product is used to define the three stages of production. Marginal cost and marginal revenue are used to determine the profit-maximizing quantity of output. How do total costs differ from marginal costs gradual wear and tear on capital goods over time and through use. A machine, for example, will not last forever because its parts will wear out slowly and eventually...

Developing Multimedia Presentations

Bank Teller With Transaction

Your economics teacher has assigned a presentation about how banks operate. You want to develop a presentation that really holds your classmates' attention. How do you go about it A multimedia presentation involves using several types of media, including photographs, videos, or sound recordings. The equipment can range from simple cassette players, to overhead projectors, to VCRs, to computers, and beyond. Multimedia, as it relates to computer technology, is the combination of text, video,...

Balance Sheet Entries for a Hypothetical Commercial Bank

When a bank is organized as a corporation, the owners contribute cash used to buy buildings and furniture. In return, the owners receive stock. When a customer opens an account, some of the deposit is set aside as a reserve, while the excess can be loaned out. Note that Net Worth NW remains unchanged. When a customer opens an account, some of the deposit is set aside as a reserve, while the excess can be loaned out. Note that Net Worth NW remains unchanged. Q When another person wants to...

The Politics of Interest Rates

Short Run Impact Monetary Policy

Because the Fed is privately owned by its member banks, and because the members of the Board of Governors have 14-year terms of office, the Fed is widely regarded as being an independent monetary authority. Even so, the Fed often comes under political pressure because it has the ability to move interest rates one way or the other. The president or members of Congress up for reelection may call for low interest rates to stimulate the economy. Incumbent politicians know that their reelection...

The Circular Flow of Economic Activity

Using Charts The circular flow diagram shows the high degree of economic interdependence in our economy. In the diagram, the factors of production and the products made from them flow in one direction. The payments for the factors, which consumers spend on goods and services, flow in the opposite direction. As a consumer, what role do you play in the circular flow of economic activity the next period with the same number inputs, than productivity went up. Productivity is often discussed in...

Cost Revenue and Profit Maximization

Profit is maximized when the marginal costs of production equal the marginal revenue from sales. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by explaining how total revenue differs from marginal revenue. Then provide an example of each. fixed cost, overhead, variable cost, total cost, marginal cost, e-commerce, total revenue, marginal revenue, marginal analysis, break-even point, profit-maximizing quantity of output After studying this...

Union Membership and Representation by Industry

Workers Unions During Depression

Percent of Employed Workers That Are Members of Represented Unions by Unions Source Bureau of Labor Statistics, 1999 Using Tables Labor unions are the most influential in the service industries, which include government, communications, public portation. In what industries do unions have few members Visit epp.glencoe.com and click on Textbook Updates Chapter 8 for an update of the data. Visit epp.glencoe.com and click on Textbook Updates Chapter 8 for an update of the data. CHAPTER 8 EMPLOYMENT...

Sources of State and Local Government Revenue

Concept Local Government

Source Statistical Abstract of the United States, 1999 23.8 Intergovernmental Revenue 34.2 21.7 Sales Taxes 5.3 17.7 Employee Retirement amp Insurance 2.1 13.9 Individual Income Tax 1.6 3.9 Higher Education Fees Charges 0.6 3.2 Corporate Income Tax 0.3 3.0 Interest Earnings 3.4 1.7 Hospital Fees 4.2 1.1 Property Taxes 25.6 0.8 Utility and Liquor Store 8.6 9.3 Other 14.0 - Source Statistical Abstract of the United States, 1999 Using Charts State and local governments have their own sources of...

Expenditures by State and Local Governments

State Spending Expenditure Graph

State 837,082 million Local 759,368 million 28.8 Intergovernmental Expenditure 19.4 Public Welfare 4.3 11.2 Insurance Trust 1.8 Elementary amp Secondary Education 34.5 9.8 Higher Education 1.9 5.6 Highways 4.0 3.5 Hospitals 5.1 2.9 Interest on General Debt 4.3 2.9 Corrections 1.5 2.7 Governmental Administration 3.9 2.5 Health 2.3 1.2 Utilities 11.1 Fire Protection 2.2 0.7 Police Protection 4.7 0.4 Parks and Recreation 2.0 Housing amp Community Development 2.6 8.5 Other 13.8 Source Statistical...

The Traditional Theory of Wage Determination

Theory Wages

Using Graphs The market forces of supply and demand explain the equilibrium wage rate for the traditional theory of wage determination. How does this theory differ from the theory of negotiated wages CHAPTER 8 EMPLOYMENT, LABOR AND WAGES 207 Median Weekly Earnings by Occupation and Union Affiliation Managerial and Professional Specialty Precision Production, Craft and Repair Technical, Sales, and Administrative Support Operators, Fabricators, and Laborers Source Bureau of Labor Statistics, 1999...

The Price of Gold When Supply and Demand Change

Economics Concepts

Using Graphs A change in supply, a change in demand, or a change in both can influence prices. What could cause the price of gold to go back up this demand, shown as DD in the figure, was combined with a relatively tight supply, SS, the price of gold reached 850 per ounce. By the mid-1990s, economic fears declined and people lost some of their desire for gold. This had the effect of shifting the demand curve to D1D1. Meanwhile, gold producers reacted to the sky-high price in a predictable...

And Theyre Taking Over

Cargo Ships Brown Tree Snakes

Bioinvasion, the spread of nonnative species, is fast becoming one of our most costly ecological problems as it disrupts food and agriculture, destroys wetlands, interferes with shipping, and drastically alters natural habitats. . . . . . . The list of troublemakers include noxious weeds 35 billion , harmful insects 25 billion , and organisms, such as the AIDS virus and cholera, that cause human disease 6.5 billion . . . . There is also a huge untallied cost. Exotic species destroy the...

Business Cycles and Fluctuations

Recession Graph Glencoe Economics Book

The term business cycle refers to alternating increases and decreases in the level of economic activity. Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by listing factors that can cause changes in the business cycle. business cycle, business fluctuation, recession, peak, trough, expansion, trend line, depression, depression scrip, econometric model, index of leading indicators After studying this section, you will be able to 1. Explain the...

Federal Government Expenditures 19802000

Source Economic Report of the President, various years Transportation i Veterans' Benefits General Science, Space amp Technology Source Economic Report of the President, various years Using Graphs The major categories of federal government expenditures show some change from 1980 to 2000. The three largest federal spending categories in 2000 were Social Security, national defense, and income security. How has spending for Social Security changed during the period from 1980 to 2000 IcyCK HERE...

The Aggregate Supply Curve

Using Graphs The aggregate supply curve shows the amount of real GDP that could be produced at various price levels. An increase in aggregate supply comes about when production costs for all the individual producers fall. What causes a decrease in aggregate supply sale at each and every price would shift the aggregate supply curve to the left.