Knowledge Base
Money, markets, work, production, and the decisions that influence how limited resources are used.
Gross domestic product measures market production, so unpaid household work such as cooking, cleaning, caring for children, shopping, and gardening is generally not included in U.S. GDP. The Bureau of Economic Analysis tracks estimates of this work separately because it still creates real economic value.
The Rule of 72 offers a quick estimate of how many years an investment could take to double at a fixed annual rate of return. Divide 72 by the expected percentage rate: at 9 percent, the estimate is about eight years. It is an approximation, not a guaranteed return.
In the United States, people without jobs are generally counted as unemployed only if they are available for work and have actively looked for work during the previous four weeks. People awaiting recall from a temporary layoff are an exception to the active-search requirement.
Gross domestic product measures the value of final goods and services produced. Intermediate goods and services used to make them are not counted again, preventing the same production from being double-counted.
In 1696, England introduced a "window tax" designed to assess wealth without invading personal privacy by examining financial records. To legally evade the tax, homeowners and landlords across Britain bricked up exterior window openings, leaving entire streetscapes with blind brick facades and darkening rental properties for poor tenants for over 150 years. The widespread resentment popularized the phrase “daylight robbery.”
In 1698, Russian Tsar Peter the Great imposed a tax on facial hair to raise state revenue and modernize Russian society. Men wishing to legally maintain a beard had to pay an annual fee of up to 100 rubles and carry a stamped copper or bronze token bearing an image of a beard and mustache, engraved with the words: “The tax has been taken; the beard is a superfluous burden.”
Under the U.S. Antideficiency Act, the federal government is strictly prohibited by law from accepting voluntary, uncompensated labor. When prominent business executives offered their full-time services to mobilize the economy during World War I and World War II, the government could not legally allow them to work for free. To maintain compliance, they were officially placed on employment contracts with a legal salary of exactly one dollar per year.
In May 2010, a trader at a major firm intended to sell \$16 million worth of futures contracts but allegedly entered the amount as \$16 billion, triggering a cascade of automated selling that briefly erased nearly \$1 trillion in market value in minutes. The event — known as the Flash Crash — exposed how tightly interconnected and algorithmically fragile global markets had become.
When Iceland's banking system collapsed in 2008 — the largest banking failure relative to a country's GDP in history — the government chose not to bail out the failed banks. Instead, it let them fail, prosecuted the executives responsible, and devalued its currency to boost exports. Within four years, Iceland had one of the fastest economic recoveries in the developed world, while countries that bailed out their banks faced years of austerity.
The U.S. Mint has spent more than one cent to produce each penny every year since 2006. In fiscal year 2023, each penny cost approximately 2.72 cents to manufacture and distribute. Despite repeated recommendations from economists and government analysts to eliminate the coin, the penny remains in circulation — largely due to lobbying from the zinc industry, which supplies the metal used in its production.