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Economics: Wealth Creation & Distribution

This document summarizes key economic concepts and statistics. It discusses the four factors that define an economic system: what is produced, how much is produced, how output is distributed, and the rate of economic growth. It also provides graphs about supply and demand curves, the number of workers per social security recipient over time, tax rates in different countries, reasons for U.S. economic success, the components of GDP and consumer price index globally and in the U.S., sources of government revenue, how federal dollars are spent, examples of what $1 billion can purchase, and statistics about the national debt.

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9 views14 pages

Economics: Wealth Creation & Distribution

This document summarizes key economic concepts and statistics. It discusses the four factors that define an economic system: what is produced, how much is produced, how output is distributed, and the rate of economic growth. It also provides graphs about supply and demand curves, the number of workers per social security recipient over time, tax rates in different countries, reasons for U.S. economic success, the components of GDP and consumer price index globally and in the U.S., sources of government revenue, how federal dollars are spent, examples of what $1 billion can purchase, and statistics about the national debt.

Uploaded by

api-3740348
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd

Chapter 9:

Economics: The Creation


and Distribution of Wealth
Four “What’s” of
an Economic System

$ What is produced?
$ What amount is produced?
$ What is the method of output
distribution?
$ What is the rate of economic growth?

2
Supply Curve

High

Price(P)

Low Quantity(S) High

3
Demand Curve

High

Price(P)

D
Low Quantity(D) High
4
Equilibrium Point
Surplus
High

Market Equilibrium
Price

S Shortage D
Low Quantity High
5
Number of Workers per Social
Security Recipient
6

0
1960 2000 2075(Est.)
Source: [Link]

6
Industrialized Nations’
Tax Rates
U.S.
Austria/Japan
Italy
Canada
Germany
Spain/Sweden
France
Finland
Denmark

0% 10% 20% 30% 40% 50% 60% 70%


Source: Parade Magazine, Apr. 12, 1998.

7
Why is the U.S.
an Economic Success?
Major Reason Percent*
Constitution 85
Free Elections 84
Free Enterprise System 81
Abundant Resources 78
Cultural Diversity 71
* Respondents could choose more than one.
Source: Investors Business Daily Survey
8
Share of World GDP(%)

1970 2001
•North America 37 38
•Asia 21 28
•Europe 33 28
•South America 7 4
•Africa/Australia 2 2
Source: Investor’s Business Daily, Apr. 29, 2003.

9
What Makes Up The
Consumer Price Index?
Recreation Apparel Other
6% 5% 5%

Medical Care/
Insurance
7%
Housing & Util.
Medical Care
39%
6%

Food &
Beverage
16%
Transportation
18%
SOURCE: U.S. Bureau of Labor Statistics 10
Where Does the
Government Get Its Money?

4% 4%
Individual Income
Taxes
9% Social Security &
Payroll Taxes
43%
Corporate Taxes

Excise Taxes

40% Other

Source: Office of Management & Budget, 2002


11
What Federal Dollars Buy (2002)

Human Resources. – 63% Interest 7.9% Other 5.7%

Defense - 17.5% Physical Resources 5.9%


Source: Office of
Management & Budget
12
What $1 Billion Can Buy
• An Egg McMuffin and large coffee for the President
& his 2,000 Secret Service agents every morning
for 575 years.
• Average annual grocery bill for 250,000
families of 4.
• One year’s food for 5 million cats & dogs.
• Tuition, room and board for the entire freshman
classes of Brown, Cornell, Harvard, Pennsylvania
& Yale with $50M leftover for books.

13
What is the National Debt?
The debt has reached $6.7 trillion+
If $1,000 bills were stacked:
– $1 Million = 4.29 Inches
– $1 Billion = 357.5 Feet
– $1 Trillion = 67 Miles
• The debt is equal to 442.2 miles in
$1,000 bills
• National Debt Clock- http://
[Link]/debt_clock/

14

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