Chapter Two: Useful Tools and Concepts

Our Tools for Understanding

YearUnemployment RateReal GDP Growth Rate %4.1% %1.1% %1.8% %2.5% %3.5% %3.1% %2.7% %1.9% %-0.3% %-3.1% %2.4% %1.8% %2.2% Table 2.1: Unemployment Rate and Real GDP Growth Rate, United States, (in percent) Sources: U.S. Bureau of Economic Analysis, ;U.S. Bureau of Labor Statistics,

Figure 2.B1: Unemployment Rate, United States, Sources: United States Bureau of Labor Statistics, United States Bureau of Economic Analysis,

2008 (5.8, -0.3) Figure 2.B2: Relationship between Unemployment and GDP Growth Rate, United States, Sources: United States Bureau of Labor Statistics, United States Bureau of Economic Analysis,

Figure 2.B3: Relationship between GDP Growth Rate and Greenhouse Gas Emissions Growth Rate, United States, Source: Greenhouse Gas data from United States Environmental Protection Agency, climatechange/ghgemissions/usinventoryreport.html.

Different Economic Theories: Examples of Two Basic Models

Factor Markets Product Markets Land, Labor, and Capital Services Produced Goods and Services Wages, Rents, Interest, and Profits Payments for Produced Goods and Services Households Firms Figure 2.1: The Circular Flow Diagram for the Basic Neoclassical Model

Figure 2.2: Economics in Context

Figure 2.3: Estimated Size of the Three Spheres of Economic Activity in the United States, 2010 Sources: U.S. Census Bureau, Statistical Abstract of the United States, 2012 (Washington, D.C.: GPO, 2011); Katie Roeger, Amy S. Blackwood, and Sarah L. Pettijohn, The Nonprofit Almanac 2012 (Washington, D.C.: Urban Institute Press, 2012); and authors’ calculations.