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© McGraw Hill
 Because learning changes
everything. ®

Chapter 2
Understanding Economics
and How It Affects Business

© 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
 Chapter Contents
How Economic Conditions Affect Businesses
Understanding Free-Market Capitalism
Understanding Socialism
Understanding Communism
The Trend toward Mixed Economies
Understanding the U.S. Economic System

© McGraw Hill
 Learning Objectives
LO 2-1 Explain basic economics.
Explain what capitalism is and how free
LO 2-2
markets work.
LO 2-3 Compare socialism and communism.
Analyze the trend toward mixed
LO 2-4
economies.
LO 2-5Describe the economic system of the
United States, including the significance of key
economic indicators (especially G DP),
productivity, and the business cycle.
LO 2-6Contrast fiscal policy and monetary
policy, and explain how each affects the
economy.
© McGraw Hill
 Mariana MazzucatoEconomist
Her mission is to transform the
economic role of governments
from regulators and fixers of
market failures to innovators
and drivers of market growth.
She works with U.S. presidential
candidates, British Parliament,
and the European Union.
Encourages combining the
powers of the private and public
sectors.
Examples: Apollo space program,
Apple.

© McGraw Hill Tania/contrasto/Redux

 Name that Company
GROWTH OF U.S. G DP can be influenced by
productivity of the nation's workforce. It can also be
impacted by the misfortunes of major U.S. companies.
When this company was forced to stop production of its
737 Max airliner, the company, as well as suppliers and
airlines that fly the 737, saw their growth severely
impacted.

© McGraw Hill
 How Economic Conditions Affect
Businesses 1

Economic Effects
.

Business success in U.S. is due partly to our free

economic and social climate.
Changes in U.S. economic or political systems
influence business success.
Global economics and global politics also influence
businesses in the U.S.

© McGraw Hill
 Economic Contrast

The economic contrast shown here is remarkable. Business is

booming in Seoul, South Korea (as shown in the photo on the right).
But North Korea, a communist country, is not doing well, as the
picture on the left shows. What do you think accounts for the
dramatic differences in the economies of these two
neighboring countries?

© McGraw Hill (L) Hg Han/AP Images; (R) Gw. Nam/Getty Images

 How Economic Conditions Affect
Businesses 2

What Is Economics?
.

Economics — The study of how society chooses to

employ resources to produce goods and services
and distribute them for consumption among
various competing groups and individuals.
Macroeconomics — The part of economics study
that looks at the operation of a nation’s economy
as a whole.
Microeconomics — The part of economics study
that looks at the behavior of people and
organizations in particular markets.

© McGraw Hill
 How Economic Conditions Affect
Businesses 3

What Is Economics? continued

Resource development — The study of how to

increase resources and to create conditions that
will make better use of those resources.
Examples of ways to increase resources:
New energy sources.
New ways of growing foods.
New ways of creating goods and services.
Nanotechnology, 3D printing, 4D technology.

© McGraw Hill
 Production and the Economy
New ways of producing
goods and services add
resources to the
economy and create
more employment. Fish
farms, for instance,
create both food and
jobs. Can you think of
other innovations
that can help
increase economic
development?

© McGraw Hill Violetastock/Getty Images

 How Economic Conditions Affect
Businesses 4

The Secret to Creating a Wealthy Economy

“The dismal science.”

Thomas Malthus believed that if the rich had most of the wealth and the
poor had most of the population, resources would run out.

Latest world statistics show population growing more

slowly than expected.

© McGraw Hill
 World Population Could
Go from Boom to Bust
The global population will
grow to nearly 10 billion
people by 2050.
This increase will have a major
impact on resources and could lead
to significant lifestyle changes.
Population should stabilize by 2100.
Due to declining birth rates.

Older people will make up a large

portion of the population for years.
Could lead to future economic
difficulties if there is a lack of young
people in the workforce.

© McGraw Hill Goodboy Picture Company/Getty Images

 How Economic Conditions Affect
Businesses 5

The Secret to Creating a Wealthy Economy

continued

Contrary to Malthus, some macroeconomists

believe a large population can be a resource.
An educated population is highly valuable.
Business owners provide jobs and economic growth for their
employees and communities as well as for themselves.

© McGraw Hill
 How Economic Conditions Affect
Businesses 6

Adam Smith and the Creation of Wealth

Smith believed that:

Freedom was vital to any economy’s survival.
Freedom to own land or property and the right to keep the
profits of a business is essential.
People will work hard if they believe they will be rewarded.

© McGraw Hill
 How Economic Conditions Affect
Businesses 7

How Businesses Benefit the Community

Invisible hand — The process that turns self-

directed gain into social and economic benefits for
all.
As people improve their own situation in life, they help the
economy prosper through the production of goods, services,
and ideas and charitable donations.
However, poverty rate in U.S. remains high.

© McGraw Hill
 Applying Adam Smith’s Theory
According to Adam Smith’s
theory, business owners are
motivated to work hard
because they know they
will earn, and keep, the
rewards of their labor. When
they prosper, as the owner
of this restaurant has, they
are able to add employees
and grow, indirectly helping
the community and the
larger economy grow in the
process. What might
motivate you to start
your own business?

© McGraw Hill Alena Kravchenko/Alamy Stock Photo

 TESTPREP 1

What is the difference between

macroeconomics and microeconomics?
What is better for an economy than
teaching a man to fish?
What does Adam Smith’s term invisible
hand mean? How does the invisible hand
create wealth for a country?

© McGraw Hill
 Understanding Free-Market
Capitalism 1

Capitalism
An economic system in which all or most of the
factors of production and distribution are privately
owned and operated for profit.
U.S., England, Australia, Canada.

State capitalism — A combination of freer markets

and some government control.
China has experienced rapid growth using state capitalism.

© McGraw Hill
 Understanding Free-Market
Capitalism 2

Four Basic Rights

1.

1. The right to own private property.

2. The right to own a business and keep all that
business’s profits.
3. The right to freedom of competition.
4. The right to freedom of choice.

© McGraw Hill
 Free-Market Capitalism’s Basic
Rights
After years of planning and
saving, Jessica Douglass
purchased a building with
plenty of room to grow and
started a business called
Flowers and Weeds. The right
to own private property and
the right to own a business
and keep its profits are two of
the fundamental rights that
exist in the economic system
called free-market capitalism.
Would either of these
rights be viable without
the other?

© McGraw Hill Photography by Virginia Harold

 Understanding Free-Market
Capitalism 3

Roosevelt’s Four Additional Freedoms

1.

1. Freedom of speech and expression.

2. Freedom to worship in your own way.
3. Freedom from want.
4. Freedom from fear.

© McGraw Hill
 Understanding Free-Market
Capitalism 4

How Free Markets Work

Free market — Decisions about what and how much

to produce are made by the market.
Consumers send signals about what they like and how they
like it.
Price tells companies how much of a product they should
produce.
If something is wanted but hard to get, the price will rise until
more products are available.

© McGraw Hill
 Circular Flow Model

Access the text alternative for slide images.

© McGraw Hill
 Understanding Free-Market
Capitalism 5

How Prices Are Determined

By buyers and sellers negotiating in the

marketplace.
A seller may want to sell shirts for $50, but only a few people
may buy at that price.
If the seller lowers the price, quantity demanded likely to
increase.

© McGraw Hill
 Understanding Free-Market
Capitalism 6

The Economic Concepts of Supply, Demand,

and Equilibrium Point
Supply — The quantity of products that
manufacturers or owners are willing to sell at
different prices at a specific time.
Demand — The quantity of products that people
are willing to buy at different prices at a specific
time.
Market price (equilibrium point) — The price
determined by supply and demand.

© McGraw Hill
 Figure 2.1 The Supply Curve at
Various Prices
The supply curve rises from
left to right. Think it through.
The higher the price of T-
shirts goes (the vertical axis),
the more sellers will be willing
to supply.

Access the text alternative for slide images.

© McGraw Hill
 Figure 2.2 The Demand Curve at
Various Prices
This is a simple demand curve
showing the quantity of T-
shirts demanded at different
prices. The demand curve
falls from left to right. It is
easy to understand why. The
lower the price of T-shirts, the
higher the quantity
demanded.

Access the text alternative for slide images.

© McGraw Hill
 Figure 2.3 The Equilibrium Point
The place where quantity
demanded and quantity
supplied meet is called the
equilibrium point. When we
put both the supply and
demand curves on the same
graph, we find that they
intersect at a price where the
quantity supplied and the
quantity demanded are equal.
In the long run, the market
price will tend toward the
equilibrium point.

Access the text alternative for slide images.

© McGraw Hill
 Bad Medicine for Consumers?

Your company, a large

pharmaceutical firm, acquired a drug
called Relivoform, a chemotherapy
drug for liver cancer.
Your finance committee
recommends increasing the price of
Relivoform from $300 to $3,000 to
help alleviate the development
costs of new drugs.
The public reacted with rage,
accusing your firm of favoring
profits over patients’ needs.
Will you follow your committee’s
recommendation and raise the
price? What are your alternatives?
What might be the consequences of
each?

© McGraw Hill
 Understanding Free-Market
Capitalism 7

Competition within Free Markets

Perfect competition — Many sellers but none is

large enough to dictate the price of a product.
Monopolistic competition — Large number of
sellers produce very similar products that buyers
nevertheless perceive as different.
Product differentiation is key.

© McGraw Hill
 Understanding Free-Market
Capitalism 8

Competition within Free Markets continued

Oligopoly — A few sellers dominate a market.

Initial investment usually very large, like aircraft.
Products from different companies priced about the same.

Monopoly — One seller controls the total supply of a

product or service, and sets the price.
Prohibited in the U.S.

© McGraw Hill
 Understanding Free-Market
Capitalism 9

Benefits and Limitations of Free Markets

Benefits:
Allows for open competition among companies.
Provides opportunities for poor people to work their way out of poverty.

Limitations:
Leads to inequality as business owners and managers usually make
more money and have more wealth than lower-level workers.
People may start to let greed drive them.

© McGraw Hill
 The Government Needs…Individual
Tax Rates from Around the World

Access the text alternative for slide images.

© McGraw Hill Source: Worldwide Tax, worldwide-tax.com, accessed November 2017.

 Atypical TaxesStrange Taxes in Some
U.S. States

© McGraw Hill Source: TurboTax, turbotax.intuit.com, accessed November 2017.

 TESTPREP 2

What are the four basic rights that people

have under free-market capitalism?
How do businesspeople know what to
produce and in what quantity?
How are prices determined?
What are the four degrees of competition,
and what are some examples of each?

© McGraw Hill
 Understanding Socialism 1

Socialism
An economic system based on the premise that
some, if not most, basic businesses should be owned
by the government so that profits can be more evenly
distributed among the people.
.

Entrepreneurs run smaller businesses.

Citizens are highly taxed.
Government is more involved in protecting the environment
and the poor.

© McGraw Hill
 Growth in Socialist Countries
Socialism has been more
successful in some countries
than in others. This photo
shows Denmark’s clean and
modern public transportation
system. In Greece,
overspending caused a debt
crisis that forced the
government to impose
austerity measures that many
Greeks oppose. What other
factors might lead to
slower growth in socialist
countries?

© McGraw Hill Oliver Foerstner/Shutterstock

 Understanding Socialism 2

The Benefits of Socialism

.

Social equality.
Free education.
Free health care.
Free child care.
Longer vacations.
Shorter work weeks.
Generous sick leave.

© McGraw Hill
 Understanding Socialism 3

The Negative Consequences of Socialism

.

Few incentives for businesspeople to take risks.

Brain drain — The loss of the best and brightest
people to other countries.
Fewer inventions and less innovation because the
reward is not as great as in capitalistic countries.

© McGraw Hill
 Understanding Communism
Communism
An economic and political system in which the
government makes almost all economic decisions
and owns almost all the major factors of production.
.

Prices don’t reflect demand, which may lead to shortages of

items, including food and clothing.
Most communist countries today suffer severe economic
depression.

© McGraw Hill
 Communism
Starting in the 1990s,
Russia made the major
change from communism
toward a viable market
economy. Still, there are
few laws in place that help
promote small businesses,
and an active black market
remains for many goods.
This “shadow economy”
represents as much as 20
percent of the country’s
GDP. Why are black
markets bad for
economic growth?

© McGraw Hill Eric Feferberg/AFP/Getty Images

 POLLING QUESTION 1

In economies, the market largely determines

goods and services get produced, who gets
them, and how the economy grows.
A. free-market
B. command
C. communist
D. socialist

© McGraw Hill
 The Trend toward Mixed Economies
1

Two Major Economic Systems

.

Free-market economies — Economic systems in

which the market largely determines what goods
and services get produced, who gets them, and
how the economy grows.
Command economies — Economic systems in
which the government largely decides what goods
and services will be produced, who will get them,
and how the economy will grow.

© McGraw Hill
 The Trend toward Mixed Economies
2

Two Major Economic Systems continued

Neither free-market nor command economies have

created sound economic conditions.
The trend has been toward mixed economies.
Economic systems in which some allocation of resources is
made by the market and some by the government.

© McGraw Hill
 TESTPREP 3

What led to the emergence of socialism?

What are the benefits and drawbacks of
socialism?
What countries still practice communism?
What are the characteristics of a mixed
economy?

© McGraw Hill
 Understanding the U.S. Economic
System 1

Key Economic Indicators

Gross domestic product (GDP) — The total

value of final goods and services produced in a
country in a given year.
As long as a company is within a country’s border, their
numbers go into the country’s G DP (even if they are foreign-
owned).
When the GDP changes, businesses feel the effect.
Gross output (GO) — A measure of total sales volume at all
stages of production.

© McGraw Hill
 The United States GDP

Access the text alternative for slide images.

© McGraw Hill Source: World Bank, worldbank.org, accessed August 2020.

 Playing Catch-UpCountries Challenging
the U.S. in GDP

Access the text alternative for slide images.

© McGraw Hill Source: World Bank, worldbank.org, accessed November 2017.

 Understanding the U.S. Economic
System 2

Key Economic Indicators continued

Unemployment rate — The number of civilians at

least 16 years old who are unemployed and tried to
find a job within the prior four weeks.
Real unemployment rate is comprised of those included in the
standard unemployment rate plus those who are
underemployed, discouraged, and marginally attached.

© McGraw Hill
 Figure 2.5 U.S. Unemployment Rate
1989 to 2020

Access the text alternative for slide images.

© McGraw Hill Source: "Monthly Unemployment Rate in the United States from December 2018 to December 2019," Statista, statista.com, accessed January 2020.
 Figure 2.6 Four Types of
Unemployment
Frictional unemployment
Frictional unemployment refers to those people who have quit work because they didn’t like
the job, the boss, or the working conditions and who haven’t yet found a new job. It also
refers to those people who are entering the labor force for the first time (for example, new
graduates) or are returning to the labor force after significant time away (for example,
parents who reared children). There will always be some frictional unemployment because
it takes some time to find a first job or a new job.
Structural unemployment
Structural unemployment refers to unemployment caused by the restructuring of firms or
by a mismatch between the skills (or location) of job seekers and the requirements (or
location) of available jobs (e.g., coal miners in an area where mines have been closed).

Cyclical unemployment
Cyclical unemployment occurs because of a recession or a similar downturn in the
business cycle (the ups and downs of business growth and decline over time). This type of
unemployment is the most serious.

Seasonal unemployment
Seasonal unemployment occurs where demand for labor varies over the year, as with the
harvesting of crops.

© McGraw Hill
 Best and Worst Cities for a Job
Search
Best Worst
Scottsdale, AZ. Brownsville, TX.
South Burlington, V Stockton, CA.
T. Newark, NJ.
San Francisco, CA. Fayetteville, NC.
Austin, TX. Detroit, MI.
Freemont, CA.

© McGraw Hill Source: Wallet Hub, wallethub.com, accessed August 2020.

 Understanding the U.S. Economic
System 3

Key Economic Indicators continued

Inflation and price indexes.

Inflation — A general rise in the prices of goods and services
over time.
Disinflation — A situation in which price increases are
slowing (the inflation rate is declining).
Deflation — A situation in which prices are declining.
Stagflation — A situation when the economy is slowing but
prices are going up anyhow.

© McGraw Hill
 How a Stack of Cash Can
Become Worthless
Hyperinflation is when the
price of goods and services
rises by 50 percent a month.
In Venezuela, the inflation rate
went from 63 percent in 2014 to
481 percent in 2016.
The currency, the Bolivar, was so
low that cash to pay for goods
and services was being weighed
instead of counted.
The Federal Reserve in the U.S.
maintains the money supply and
carefully sets interest rates so
that inflation stays under control.

© McGraw Hill Manaure Quintero/Bloomberg/Getty Images

 Understanding the U.S. Economic
System 4

Key Economic Indicators continued

Inflation and price indexes. continued

Consumer price index (CPI) — Monthly statistics that
measure the pace of inflation or deflation.
Core inflation — CPI minus food and energy costs.
Producer Price Index (PPI) — An index that measures the
change in prices at the wholesale level.

© McGraw Hill
 Understanding the U.S. Economic
System 5

Productivity in the United States

.

Productivity in the U.S. has risen due to the

technological advances that have made production
faster and easier.
High productivity through computers and robots
can lead to high unemployment.

© McGraw Hill
 POLLING QUESTION 2

Do you believe the rise in productivity due to

computers and robots is positive or negative
for the economy?
A. Positive
B. Negative

© McGraw Hill
 Understanding the U.S. Economic
System 6

Productivity in the Service Sector

.

New technology adds to the quality of the services

provided, but not to the worker’s output.
A new form of measurement needs to be created to
account for the quality as well as the quantity of
output.

© McGraw Hill
 Measuring Productivity
It can be difficult to measure
productivity in the service
sector. New technology can
improve the quality of
services without necessarily
increasing the number of
people served. A doctor can
make more-accurate
diagnoses with scans, for
instance, but still can see only
so many patients in a day.
How can productivity
measures capture
improvements in the
quality of service?

© McGraw Hill Tom Werner/Digital Vision/Getty Images

 Understanding the U.S. Economic
System 7

The Business Cycle

.

Business cycles — The periodic rises and falls that

occur in economies over time.
Four phases of long-term business cycles:
1.

1.

1. Economic boom — Business is booming.

2. Recession — Two or more consecutive quarters of decline in the GDP.
3. Depression — A severe recession, usually accompanied by deflation.
4. Recovery — When the economy stabilizes and starts to grow,
eventually leading to an economic boom.

© McGraw Hill
 Understanding the U.S. Economic
System 8

Stabilizing the Economy through Fiscal Policy

Fiscal policy — The federal government’s efforts

to keep the economy stable by increasing or
decreasing taxes or government spending.
Keynesian economic theory — Theory that a
government policy of increasing spending and
cutting taxes could stimulate the economy in a
recession.
Tools of fiscal policy:
Taxation.
Government spending.

© McGraw Hill
 Understanding the U.S. Economic
System 9

Stabilizing the Economy through Fiscal Policy

continued
.

National deficit is the amount of money the federal

government spends beyond what it collects in
taxes for a given fiscal year.
Deficit increases the national debt — The sum of
government deficits over time.
National surplus is when the government takes in
more revenue than it spends.

© McGraw Hill
 Figure 2.7 The National Debt

Access the text alternative for slide images.

© McGraw Hill
 What’s Our National Debt?
The National Debt has reached over $25
trillion.
If $1 bills were stacked, the National Debt
would stretch over 1,575,000 miles. The
moon is only 238,857 miles away.
Follow the U.S. National Debt Clock here.

© McGraw Hill Source: U.S. Debt Clock, usdebtclock.org, accessed June 2020.
 What Can a Dollars Buy?
A million dollars can buy an Egg McMuffin
and a large coffee for the President of the
United States and 2,000 Secret Service
members every day for almost four months.
A billion dollars can buy Egg McMuffins and
large coffees for them for 308 years.
A trillion dollars can buy Egg McMuffins and
large coffees for them for 307,681 years.

© McGraw Hill
 Understanding the U.S. Economic
System 10

Using Monetary Policy to Keep the Economy

Growing

Monetary policy — The management of the

money supply and interest rates by the Federal
Reserve Bank.
The Fed’s most visible role is raising and lowering of interest
rates.
When the economy is booming, the Fed tends to raise interest
rates.
When the economy is in a recession, the Fed tends to decrease
interest rates.

© McGraw Hill
 The Fed’s Role in the 2008 Financial
Crisis
The financial crisis
beginning in 2008
caused much anguish
among Wall Street
workers and people in
general. How effective
was the
government’s
response?

© McGraw Hill Scott Heins/Stringer/Getty Images

 TESTPREP 4

Name the three economic indicators and

describe how well the United States is doing
based on each indicator.
What is the difference between a recession
and a depression?
How does the government manage the
economy using fiscal policy?
What does the term monetary policy mean?
What organization is responsible for
monetary policy?

© McGraw Hill
 Because learning changes
everything. ®

www.mheducation.co
m

© 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
 Accessibility Content: Text Alternatives for Images

© McGraw Hill
 Circular Flow Model – Text Alternative
Return to parent-slide containing images.

Households provide input such as factors of

production to businesses, who provide goods and
services to households. Businesses also provide
input payments to households, who provide buying
power to businesses.

Return to parent-slide containing images.

© McGraw Hill
 Figure 2.1 The Supply Curve at Various
Prices – Text Alternative
Return to parent-slide containing images.

The graph shows the relationship between the price

of T-shirts and the quantity supplied. An upward
curving line, labeled supply curve, indicates that as
the price of T-shirts rises, the quantity also rises.

Return to parent-slide containing images.

© McGraw Hill
 Figure 2.2 The Demand Curve at Various
Prices – Text Alternative
Return to parent-slide containing images.

The graph shows the relationship between the price

of T-shirts and the quantity demanded. A downward
curving line on the chart, labeled demand curve,
indicates that as the price of T-shirts decreases, the
quantity demanded increases.

Return to parent-slide containing images.

© McGraw Hill
 Figure 2.3 The Equilibrium Point – Text
Alternative
Return to parent-slide containing images.

The graph shows the relationship between the price

of T-shirts and the quantity of T-shirts. A downward-
sloping demand curve and an upward-sloping supply
curve are shown. The point at which these two
curves intersect is labeled as the equilibrium point.
Here, it shown at a price of 15 dollars and a quantity
of 25.

Return to parent-slide containing images.

© McGraw Hill
 The Government Needs… Individual Tax Rates
from Around the World – Text Alternative
Return to parent-slide containing images.

The tax rates, in approximate percentages, are as follows:

The United States, 39 percent
Australia, 17 percent to 45 percent
Belgium, 25 percent to 50 percent
Canada, 15 percent to 28 percent
France, 6 percent to 41 percent
Germany, 13 percent to 45 percent
Hong Kong, 2 percent to 17 percent
Japan, 5 percent to 50 percent
Mexico, 30 percent
Switzerland, 12 percent
United Kingdom, 45 percent
Return to parent-slide containing images.

© McGraw Hill
 The United States GDP – Text Alternative
Return to parent-slide containing images.

A bar graph shows the growth of the U S, GDP from

1950 to 2019 in trillion dollars.
1950, 293.8 trillion dollars
1960, 526.4 trillion dollars
1970, 1,038.5 trillion dollars
1980, 2,789.5 trillion dollars
1990, 5,803.1 trillion dollars
2000, 9,817 trillion dollars
2019, 21,374 trillion dollars

Return to parent-slide containing images.

© McGraw Hill
 Playing Catch-Up Countries Challenging the
U.S. in GDP – Text Alternative
Return to parent-slide containing images.

A bar graph shows the GDP of 5 countries in trillion

dollars:
Russia, 1,700 trillion dollars
Brazil, 1,840 trillion dollars
India, 2,875 trillion dollars
Japan, 5,082.1 trillion dollars
China, 14,343 trillion dollars
United States, 21,374 trillion dollars

Return to parent-slide containing images.

© McGraw Hill
 Figure 2.5 U.S. Unemployment Rate 1989–
2017 – Text Alternative
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In 1989, unemployment was at approximately 5.5

percent. It rose to a peak of nearly 8 percent around
1992. It then dropped to a low of just below 4
percent in 2000. It then rose again to just over 6
percent in 2003, before dropping to just below 5
percent in 2006 and 2007. Unemployment then
spiked to a high of about 10 percent in 2009. Since
then, it has dropped steeply to under 4 percent in
early 2020. Then it rose sharply to 14.7 percent by
mid-2020.

Return to parent-slide containing images.

© McGraw Hill
 Figure 2.7 The National Debt – Text
Alternative
Return to parent-slide containing images.

This illustrates the rising national debt in trillions,

spanning from 1980 to 2017. In 1980, the debt was
just under $1 billion and has risen steadily since,
reaching to more than $26 trillion in 2017.

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© McGraw Hill