536 Miller Economics Today, Nineteenth Edition
Chapter 11 Classical and Keynesian Macro Analyses
An Antiterrorism Regulation Creates an Aggregate Supply Shock
In August 2002, President George Bush signed the Trade Act, which, among other things, created a new set
of transportation security rules aimed at reducing the likelihood that terrorists would smuggle weapons into
the United States. The new rules apply to every mode of transportation trucks, trains, ships, and planes
and require these transportation companies to send e-mails or faxes notifying the Bureau of Customs and
How Sticky Are Prices in the United States Economy?
Some Evidence on the Imp in
the Journal of Political Economy, made a study of how often prices change in the U.S. economy. What
they found is that in the U.S. economy, the median time between time and price changes (excluding
temporary price changes such as sales and specials) was 8 to 12 months. It is also the case that service
prices change less often than goods prices, and prices of goods that use a high proportion of raw materials
change more often, as do prices of unprocessed food items.
Lecture Extender Examples 537
Drilling for Offshore Oil
In 2010, the Obama administration implemented more restrictive regulation of oil exploration and production
in the areas just offshore of the United States. The cost of drilling offshore oil wells is likely to increase
significantly as a result. Based on current assessments, these areas have an estimated 18 billion barrels of
Banning Women from the Labor Force: The Case of Afghanistan
In the mid-1990s, the Taliban seized power in Afghanistan after 18 years of war and proclaimed a
fundamentalist Muslim state. This strict Muslim state existed until the Taliban government was