1. PowerPoint Presentation by Charlie Cook Copyright © 2004 South-Western. All rights reserved. Chapter 1 The Macroeconomy

2. Copyright © 2004 South-Western. All rights reserved.1–2 Fundamental Issues 1.What is macroeconomics, and what are its distinguishing features? 2.What are key macroeconomic variables? 3.What are the key issues in macroeconomics? 4.Why is macroeconomics a controversial subject?

3. Copyright © 2004 South-Western. All rights reserved.1–3 Figure 1–1 Output and Employment in the United States, 1959–Present Sources: Economic Report of the President, 2002; Economic Indicators (various issues).

4. Copyright © 2004 South-Western. All rights reserved.1–4 Figure 1–2 U.S. Unemployment, 1959–Present Sources: Economic Report of the President, 2002; Economic Indicators (various issues).

5. Copyright © 2004 South-Western. All rights reserved.1–5 Figure 1–3 Annual Money Growth Rates and Inflation Rates in the United States, 1960–Present Sources: Economic Report of the President, 2002; Economic Indicators (various issues).

6. Copyright © 2004 South-Western. All rights reserved.1–6 Figure 1–4 The U.S. Balance of Trade, 1949–Present Sources: Economic Report of the President, 2002; Economic Indicators (various issues).

7. Copyright © 2004 South-Western. All rights reserved.1–7 Sources: Economic Report of the President, 2002; Federal Reserve Bulletin (various issues). Figure 1–5 The Changing Value of the Dollar

8. Copyright © 2004 South-Western. All rights reserved.1–8 Source: World Bank, World Development Indicators, 2003. Figure 1–6 Per Capita Output Comparisons for Selected Nations

9. Copyright © 2004 South-Western. All rights reserved.1–9 Source: International Monetary Fund, World Economic Outlook, April 2002. Figure 1–7 Output Growth Comparisons

10. Copyright © 2004 South-Western. All rights reserved.1–10 Figure 1–8 Average Inflation Rates for Selected Nations and Regions of the World Source: International Monetary Fund, World Economic Outlook, April 2002.

11. Copyright © 2004 South-Western. All rights reserved.1–11 Sources: International Monetary Fund, World Economic Outlook, April 2002; Economic Report of the President, 2002; Economic Indicators (various issues). Figure 1–9 World Output and the Declining Predominance of the United States World real GDP ($ billions) U.S. real GDP as percent of world real GDP

12. Copyright © 2004 South-Western. All rights reserved.1–12 Source: International Labor Organization. Figure 1–10 Annual Hours Worked Per Person in Selected Nations

13. Copyright © 2004 South-Western. All rights reserved.1–13 Source: Bureau of Economic Analysis. Figure 1–11 The Contribution of Health Care to U.S. Economic Activity and Employment Output growth coming from health care (percent) Rate of job growth (percent)

14. Copyright © 2004 South-Western. All rights reserved.1–14 Source: Friedrich Schneider, “The Increase of the Size of the Shadow Economy of Eighteen OECD Countries:Some Preliminary Explanations,” CESifo Working Paper no. 306, June 2000. Figure 1–12 The Relative Size of the Shadow Economy and the Total Tax and Social Security Burden in Selected Nations Shadow economy activity as a percentage of official economic activity