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: Investors.com

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.

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 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
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 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.

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 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

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 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
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 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.

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 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://
www.brillig.com/debt_clock/

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