Lecture Extender Examples 529
Chapter 8
How the Internet Has Contributed to a Lower U.S. Inventory-to-Sales Ratio
In the 1990s, there was widespread adoption of just-in-time inventory techniques by U.S. businesses, which
are techniques that companies use to keep inventories from running out or building up beyond desired
levels. The Internet has facilitated the implementation of many just-in-time inventory techniques. When a
company that supplies basic components used in a variety of electronic products experiences an inventory
GDP and Economic Welfare
Gross domestic product, or GDP, has become the most important measure of how well the economy
performs. It is used by policymakers, economists, international agencies, and the media as the primary
lth and well-being, but it was not designed for this role. It is the sum
of the value of final products and services produced in one year by domestic resources, with no
Many developing countries depend on natural resources for much of their income and employment. When
a forest is cut down in Costa Rica, the output is sold, and if we look only at GDP figures, the economy
appears to be growing richer. But what if the trees are not replaced so that their removal results in
530 Miller Economics Today, Nineteenth Edition
The Importance of Distinguishing Between Real GDP and Nominal GDP
Suppose that you are advising a presidential candidate in an election campaign running against the
incumbent president for the opposing party who points out that GDP has risen in every quarter since she has
been in office. The president is using this information to argue that that the voters should reelect her because
What the GDP Figures in China Really Mean
For years, the Western world has been regaled by impressive figures on the growth in the Chinese economy.
Whereas the United States has been happy with growth rates of 3 and 4 percent per year, the Chinese
economy has been growing at 7, 8, even 9 percent per year. But what do such statistics really mean? One