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The U.S. Economy

以美國的經濟活動，來說明經濟學的三大課題：生產什麼，如何生產，以及如何分配

2

What America Produces The output of the U.S. economy is

large and varied. （經濟活動的產出十分複雜，台灣也有沒有例外）

3

How Much Output The total value of each good

produced is determined by multiplying the physical output of each good by its price.

如何計算一個經濟活動體 ( 國家）的產值

最終財貨及勞務＊市場價格

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How Much Output （產出是多少）

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Gross Domestic Product (GDP) The total value of all final goods

and services produced in a country during a given time period. （在一固定期間，一個國家最終財貨及勞務的總價值）

It is a summary of a nation’s output.

國內生產總值 (GDP)

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Real GDP （實質 GDP) Real GDP is the inflation-adjusted

value of GDP. ( 經過物價調整） It is the value of output measured

in constant prices. （以固定價格來衡量）

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Inflation Adjustments Inflation adjustments delete the

effects of rising prices by valuing output in constant dollars. （排除通貨膨脹的影響）

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Inflation Adjustments

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International Comparisons With 5% of the world’s population,

the U.S. produces over 20% of the world’s total output.

U.S. output is two and one-half times larger than the world’s third largest economy, Japan.

各國 GDP 的比較。

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International Comparisons U.S. output is twelve times larger

than Mexico’s.

• U.S. output exceeds the combined production of all countries in Africa and South America.

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Real GDP (Output) of Specific Countries (2001)

Gross domestic product (in U.S. $ trillion)

United

States

China Germany Britain RussiaJapan Mexico Indonesia Colombia Haiti

3.25

2.071.42

5.02

0.82 0.59 0.29 0.010.99

10.07

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Per Capita GDP( 每人 GDP) Total GDP divided by total

population. GDP/ 全國人口數 It is an indicator of how much

output the average person would get if all output were divided evenly among the population.

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Nation GDP per capita

Nation GDP per capita

United States $34,280 World Average 7,370

Japan 25,550 China 3,950

France 24,080 Jordan 3,880

Spain 19,860 Indonesia 2,830

Greece 17,520 India 2,820

Mexico 8,240 Ethiopia 800

GDP per Capita Around the World (2001)

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Historical Comparison People who the U.S. government

currently classifies as “poor” live better today than the average American family did in the 1950s.

過去經濟發展成果，以 GDP, 來比較。

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Economic Growth （經濟成長） An increase in output (real GDP). An expansion of production

possibilities.

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Economic Growth

U.S. output grows 3% a year, population grows 1% a year.

• Incomes will double in thirty-five years at a 2% growth rate.

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Social Welfare （社會福利） GDP should not be confused with

broader measures of social welfare.

It doesn’t include home production and volunteer activities.

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Social Welfare It doesn’t directly measure noise

（燥音） , congestion （擁擠） , and pollution （污染） associated with production.

It includes production we’d rather do without.

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The Mix of Output （產出的組合） The major uses of total output

include: Household consumption Business investment Government services Exports

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The Uses of GDP （ GDP 的組成）

Consumption 70%Investment 15%

State and local 12%

Net exports -4%

Federal 7% Government19%

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Consumer Goods （消費財） Largest category Accounts for over two-thirds of U.S.

total output. （２ / ３以上）

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Three Types of Consumer Goods Durable goods – expected to last

three years.( 耐久財 ) Examples include cars, furniture, and

refrigerators. Purchases of durable goods are often cyclical, that is, very sensitive to economic trends.( 有週期性 , 與經濟趨勢有關 )

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Three Types of Consumer Goods Nondurable goods – items bought

frequently.( 非耐久財 )Examples include clothes, food, and gasoline.

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Three Types of Consumer Goods Services( 勞務 )Over half of consumer output is services.Examples include medical care, entertainment, utilities and other services.( 醫療、娛樂、公共水電等）

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Investment Goods （投資財） Expenditures on (production of)

new plant and equipment (capital) in a given time period, plus changes in business inventories.（在一定的期間內，對新廠房及設備的投資，以及存貨的變動）

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Investment Goods Investment goods are used to:

Replace worn-out equipment and factories, thus maintaining our production possibilities.Increase and improve our stock of capital, thereby expanding our production possibilities.

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Government Services Federal, state, and local

governments purchase resources to provide public services.

These resources are not available for consumption or investment.

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Government Services Only that part of federal spending

used to acquire resources and produce services is counted in GDP.

Income transfers are not counted in GDP.

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Government Services Income transfers are payments

to individuals for which no current goods or services are exchanged.（所得轉移的支付）

Examples include Social Security, welfare, and unemployment benefits. （社會救濟金，失業金）

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Government Services State and local governments use

more resources than federal government.

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IN GOD WETRUST

INCOME TRANSFERS

PURCHASES OF GOODS AND SERVICES

INTEREST

Federal Outlays, by Type

National defense ($376

billion)Health Programs ($468 billion)

Other Services ($306 billion) Interest

payments($161

billion)

Other income transfers($330 billion)

Social Security Benefits ($479 billion)

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Net Exports （淨出口 ) Exports are goods and services

sold to foreign buyers.( 出口 ) Imports are goods and services

purchased from foreign sources.( 進口 )

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Net Exports Net Exports = Exports – Imports

In 2003, imports were larger than exports.We used more goods and services than we produced in that year.Net exports were negative.

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Changing Industry Structure The mix of output has changed

dramatically.

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A Century of GDP Changes

Manufacturing 22%

Government 10%

THE MIX OF OUTPUT IN 1900

Construction and Mining 9%

Farming 37%Services 22%

Services 54%

Government 18%

Manufacturing 20%

Construction and Mining 6%

THE MIX OF OUTPUT IN 2000

Farming 2%

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Decline in Farming( 農業比重降低 ) In 1900, nearly 4 of 10 workers

worked in agriculture. Today fewer than 2% of workers

are farmers.

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Decline in Manufacturing( 製造業比重降低 ) Between 1860 and 1920, the

manufacturing share of GDP doubled.

After World War II, the manufacturing share of output declined.

It accounts for only 20% of total output today.

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Decline in Manufacturing In the last 50 years, the volume of

manufacturing output increased while the manufacturing share of GDP decreased.

• Manufacturing output increased fourfold while manufacturing employment only increased 20 percent.

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Growth of Services( 服務業比重提高 ) Services generate over 70% of

total output. It is the fastest growing sector. Between 2005 and 2115, 98% of

all job growth will be in services.

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Growth in Trade( 貿易的成長 ) International trade is increasingly

important. Import ratios have increased from

5% in 1920’s to over 13% today.

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Growth in Trade Globalization is likely to continue:

( 全球自由化的推動 )Removal of trade barriers.Advances in communications and transportation technologies.Increased consumption of services.

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HOW America Produces( 如何生產 ) Factors of Production( 生產要素 )

Resource inputs used to produce goods and services, e.g., land, labor, capital, entrepreneurship.

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Factors of Production The U.S. has ample resources to

produce goods and services. World’s third-largest population. World’s fourth-largest land area.

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Capital Stock( 資本 ) U.S. capital stock is over $30 trillion worth of machinery, factories, and buildings.

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Capital Stock American production is very capital

intensive.

Capital intensive – production processes that use a high ratio of capital to labor inputs.

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Factor Quality( 品質 ) Productivity – output per unit of

input or output per labor hour. Human capital – the knowledge

and skills possessed by the work force.

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Factor Quality The high productivity of the U.S.

economy results from using highly educated workers in capital-intensive production processes.

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Factor Mobility( 產業間的移動 ) Our continuing ability to produce

goods and services depends on how well resources are reallocated from one industry to another.

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Business Types( 公司的型態 ) Corporations – owned by many

stockholders.( 上市公司 ) Partnerships – owned by a small

number of individuals.( 合夥 ) Proprietorships – single owner.

( 獨資 )

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Corporate America Corporations produce the largest

portion of GDP. Proprietorships are most numerous

but produce a small portion of GDP.

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U.S. Business Firms: Numbers vs. Size

Number of firms

Proprietorships72%

Partnerships8%

Corporations20%

Share of total sales

Corporations86%

Proprietorships9%

Partnerships5%

Share of total assets

Corporations84%

Partnerships8%

Proprietorships8%

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Government Regulation( 政府管理 ) Government plays a large role in

deciding WHAT, HOW, and FOR WHOM goods are produced. Provides a legal framework Protects consumers Protects labor Protects the environment

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Providing a Legal Framework One of the most basic functions of

government is to establish and enforce the rules of the game.

提供良好的競爭環境。

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Providing a Legal Framework The government gives legitimacy

to contracts – establishes the rules for such pacts and enforces their provisions.

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Providing a Legal Framework The government lays the

foundation for market transactions – establishes ownership rights, contract rights, and other rules of the game.

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Protecting Consumers（保護消費者權益） The government tries to protect

consumers from monopoly. Monopoly is a firm that produces the

entire market supply of a particular good or service. （獨占）

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Protecting Consumers Antitrust laws prohibit moves that

threaten competition. （反拓拉斯法 )

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Protecting Consumers U.S. Department of Justice and

Federal Trade Commission regulates prices and advertising.

行政院消費者保護委員會

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Protecting Consumers The government ensures the

safety of products by requiring testing of drugs, food additives, and other products.

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Protecting Labor Child labor laws prevent the

exploitation of children. Labor has the right to organize and

set rules for the workplace. 行政院勞工委員會

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Protecting the Environment Historically the environment was

not protected. 行政院環境保護委員會

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Protecting the Environment Decisions on how to produce were

based on costs alone, not on how the environment is affected.

Resulted in air, water, and noise pollution.

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Protecting the Environment Without government intervention,

these side effects of production would be common.

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Externalities Costs (or benefits) of a market

activity borne by a third party. 外部成本

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Striking a Balance Government interventions reflect

the conviction that the market alone doesn’t always the best way of producing goods and services.

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Striking a Balance Government failure might

replace market failure, leaving us worse off.

Government regulation may inhibit production, raise prices, and limit consumer choices. （政府的法規限制生產，影響價格以及消費者的選擇權利）

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FOR WHOM America Produces（為誰生產） Who gets which slice of the pie?

Will everyone get an equal slice? Will some get a lot more than others?

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Market Economy （市場經濟） In a market economy, a person’s

income depends on . . . the quantity and quality of resources

owned, and the price that those resources

command in the market.

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Karl Marx’s Predictions（馬克思的預測） Capitalists continue to accumulate

wealth, power, and income. All capitalist are rich. All workers are poor.

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Why Marx Was Wrong （為什麼馬克斯是錯的 ) Labor’s share of output has risen.

( 工人收入比重提高 )

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Why Marx Was Wrong Distinction between “workers” and

“capitalists” changed by profit sharing, employee ownership, and widespread corporate stock ownership.( 利潤分享 , 股票上市等 )

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The Distribution of Income The richest fifth of U.S. households

gets nearly half of all the income. The poorest fifth gets only a sliver. 所得分配不平均。

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The Distribution of Income Inequalities tend to be larger in

poorer countries. 窮國所得分配不平均。

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The personal distribution of income tends to become more equal as countries develop.

The Distribution of Income

Personal distribution of income – the way total personal income is divided up among households or income classes.

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Slices of the U.S. Income Pie

Richest fifthof population

49%

Second fifth23%

Third fifth15%

Fourthfifth9%

Poorest fifth 4%

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Income Group

1999 Income (dollars)

Average Income

Share of Total Income

(percent) Lowest fifth 0 –$17,970 $ 10,136 3.5% Second fifth 17,971 – 33,314 25,468 8.8 Third fifth 33,315 – 53,000 42,629 14.7 Fourth fifth 53,000 – 83,500 66,839 23.0 Highest fifth above 83,500 145,470 50.0

Distribution of Personal Income: 2001

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Income Mobility Permanent inequality is more the

exception than the rule in the U.S. economy.

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Income Mobility Income mobility makes lifelong

incomes much less unequal than annual incomes.

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In-Kind Income （實物補貼） Goods and services received

directly, without payment in a market transaction.

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In-Kind Income Examples of in-kind income

include:Public housingFood stampsSubsidized public educationMedicare subsidies

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In-Kind Income Because of in-kind income, money

income understates the standard of living for some.

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In-Kind Income The distribution of money income

is not synonymous with the distribution of goods and services.

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Taxes and Transfers Taxes and transfers effect the FOR

WHOM question by effecting the distribution of income.

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Progressive Tax （累進稅） A tax system in which tax rates

rise as incomes rise. An example is the federal income tax.

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Progressive Tax A progressive tax makes after-tax

incomes more equal than before-tax incomes.

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Regressive Tax （累退稅） A tax system in which tax rates fall

as incomes rise. Regressive taxes include Social

Security, payroll taxes, state and local sales tax.

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Regressive Tax A regressive tax has a tendency to

make after-tax distribution of income less equal.

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Taxes The net effects of progressive and

regressive taxes are zero. In total the tax system does not

equalize incomes very much.

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Transfers The largest income transfer

program is Social Security Over $500 billion a year is given to

50 million people.

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Transfers The income transfer system gives

lower income households more output than the market provides.

Raises their share from 1% to 4% of total income.

The U.S. Economy

End of Chapter 2