1. Using fiscal policy, what tools would be used to expand the economy & alleviate the problem of unemployment, p. 267.
2. Given the size of the public debt in the United States how does it compare with other countries as a percentage of GDP, p. 280.
3. What approaches can be used to reduce the size of the public debt?
4. Use the Web to find what is the current size of the budget deficit and the public debt in the United States.

= ( 2800f446 > D as & Just as there is considerable income inequality among families within a nation, so too is there great income inequality among nations. According to the United Nations, the richest 20 percent of the world's population receives more than 75 percent of the world's income; the poorest 20 percent receives less than 2 percent. The poorest 60 percent receives less than 6 percent of the world's income. Classifications The World Bank classifies countries into four income categorieshigh-income, upper-middle-income, lower-middle-income, and low- incomeon the basis of national income per capita, as Figure 21.1 shows. The higl-income nations, shown in dark green, are known as the industrially advanced countries (IACs). They include the United States, Japan, Canada, Australia, New Zealand, and most of western Europe. In general, these nations have well-developed market economies based on large stocks of capital goods, advanced production technologies. and well-educated workers. In 2020 this group of economies had an average per capita income of $46.036. Paze 451 FIGURE 21.1 Groups of economies. The world's nations are grouped into industrially advanced countries (IACs) and developing countries (DVCs). The IACs (shown In dark green) are high-income countries. The DVCs are upper-middle-income, lower-middle-income, and low-income countries (shown respectively in light green, yellow, and orange). B Low ($1,045 or less) [ Lower middle ($1,046-%$4,095) Upper middie ($4,096-512,695) [l High ($12,696 or more) [l No data ii { 2670f446 > 2 Aa Page 440 Recent U.S. Trade Deficits LO20.6 Identify the causes and consequences of recent U.S. trade deficits. As Figure 20.2a shows, the United States has experienced large and persistent trade deficits in recent decades. These deficits rose rapidly in the early 2000s, with the trade deficit on goods and services peaking at $764 billion in 2006. The trade deficit on goods and services then declined precipitously to just $395 billion in 2009 as consumers and businesses greatly curtailed their purchases of imports during the Great Recession of 2007-2009. As the economy recovered from that recession, the trade deficit on goods and services began rising again and reached $555 billion in 2011 before a series of annual deficits that ranged between $447 billion and $581 billion through 2019. The strong stimulus spending enacted to fight the COVID-19 pandemic in 2020 and the strong rebound in U.S. economic growth during 2021 caused cash-rich U.S. consumers to increase their purchases of imports at the same time that many foreign consumers cut back on their purchases of U.S. exports (because their countries were experiencing slower recoveries from the COVID-19 recession than the United States was). The result was a massive $861 billion trade deficit in goods and services for the United States in 2021. The current account deficit ( Figure 20.2b) reached a then-record high of $817 billion in 2006, equivalent to about 6.0 percent of that year's GDP. The current account deficit subsequently declined to $380 billion2.6 percent of GDPin the recession year 2009. After the 2007-2009 recession ended, the current account deficit fluctuated but generally tended to increase, reaching $472 billion in 2019, or about 2.2 percent of that year's GDP. In 2021, however, the current account deficit soared to $822 billion, thereby exceeding 2006's nrevious record of SR17 hillion But hecause 118 GNP had erown 66 nercent lareer hetween 2006 and 7071 the 8272 hillion current