Principles of Economics: Look at a newspaper or at the Web site http://www.economist.com to find three stories about the economy that have been in the news lately. For each story, identify one (or more) of the Ten Principles of Economics discussed in this chapter that is relevant, and explain how it is relevant.
Article 1: Economic and Financial IndicatorsSummary of article content according to Economic and Financial Indicators (2008):Ã¢ÂÂ¢Unemployment rate in America went from 4.7% to 5% in December.
Ã¢ÂÂ¢American employers, added just 18,000 workers to their payrolls in December not including farmers.
Ã¢ÂÂ¢Home sales fell by 2.6% in November, after a rise in October of 3.7%.
Ã¢ÂÂ¢In Europe high inflation persisted at the end of last year.
Ã¢ÂÂ¢The average inflation was 2.1% for 2007.
Ã¢ÂÂ¢In Britain mortgages fell more than a third from the earlier year.
Ã¢ÂÂ¢Mexico raised consumer's prices by 4 percent.
Ã¢ÂÂ¢Worryingly, inflation forecasts are moving in the opposite direction.
Relevance to the Ten Principles of Economics:The article is relevant to principle number ten. The following are clearly indicated.
Ã¢ÂÂ¢Increases in the amount of money in the economy result in inflation.
Ã¢ÂÂ¢Level of unemployment is slowly rising in America and Europe.
Ã¢ÂÂ¢Inflation surely heading for Short-run tradeoff between inflation and unemployment.
Ã¢ÂÂ¢Economic is pushing inflation and unemployment in opposite directions.
Article 2: The stimulus package: Full speed aheadSummary of article content according to The stimulus package: Full speed ahead (2008):Ã¢ÂÂ¢America's economy is in a terrible pickle.
Ã¢ÂÂ¢House prices are descending and no end in sight.
Ã¢ÂÂ¢American's wealth is tied up in bricks.
Ã¢ÂÂ¢Democrats and Republicans reached a deal on how to stimulate the economy.
Ã¢ÂÂ¢Households will receive tax rebates between $300 and $1,200.
Ã¢ÂÂ¢The package includes a plan to help the housing market.
Ã¢ÂÂ¢Democrats ensured that even families too poor to pay taxes will benefit.