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 PA RK IN
PA R K I N BA D E

MACROECONOMICS

BA D E
MACROECONOMICS
C ANADA IN THE G LOBAL ENVIRONM ENT TENTH EDITION

CANADA IN THE GLOBAL ENVIRONMENT

TENTH EDITION

www.pearson.com 90000
ISBN 978-0-13-468683-7

9 780134 686837
 TO OUR STUDENTS

A01_PARK6837_10_SE_FM.indd 7 07/12/17 1:01 PM

This page intentionally left blank
 Michael Parkin is Professor Emeritus in the Department of
ABOUT THE AUTHORS
◆
Economics at the University of Western Ontario, Canada. Professor Parkin has
held faculty ­appointments at Brown University, the University of Manchester,
the University of Essex, and Bond University. He is a past president of the
Canadian Economics Association and has served on the editorial boards of
the American Economic R
­ eview and the Journal of Monetary Economics and
as managing editor of the Canadian Journal of Economics. Professor Parkin’s
research on macroeconomics, monetary ­economics, and international
economics has resulted in over 160 publications in j­ournals and edited
volumes, including the American Economic Review, the Journal of Political
Economy, the Review of Economic Studies, the Journal of Monetary Economics,
and the Journal of Money, Credit and Banking. He became most visible to the
public with his work on inflation that discredited the use of wage and price controls.
Michael Parkin also spearheaded the movement toward European monetary union.
Professor Parkin is an experienced and dedicated teacher of introductory economics.

Robin Bade earned degrees in mathematics and economics

at the University of Queensland and her Ph.D. at the Australian National
University. She has held faculty appointments at the University of
Edinburgh in Scotland, at Bond University in Australia, and at the
Universities of Manitoba, Toronto, and Western Ontario in Canada.
Her research on international capital flows appears in the International
Economic Review and the Economic Record.
Professor Parkin and Dr. Bade are the joint authors of Foundations of
Economics (Addison Wesley), Modern Macroeconomics (Pearson Education
Canada), an intermediate text, and have collaborated on many research
and textbook writing projects. They are both experienced and dedicated
teachers of introductory economics.

ix

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 PART ONE PART FOUR
BRIEF CONTENTS
◆
INTRODUCTION 1 MACROECONOMIC FLUCTUATIONS 243
CHAPTER 1 What Is Economics? 1 CHAPTER 10 Aggregate Supply and Aggregate
CHAPTER 2 The Economic Problem 33 Demand 243
CHAPTER 3 Demand and Supply 57 CHAPTER 11 Expenditure Multipliers 267
CHAPTER 12 The Business Cycle, Inflation, and
PART TWO Deflation 297
MONITORING MACROECONOMIC
PERFORMANCE 87 PART FIVE
CHAPTER 4 Monitoring the Value of Production: MACROECONOMIC POLICY 323

GDP 87 CHAPTER 13 Fiscal Policy 323

CHAPTER 5 Monitoring Jobs and Inflation 111 CHAPTER 14 Monetary Policy 347
CHAPTER 15 International Trade Policy 371
PART THREE
MACROECONOMIC TRENDS 135
CHAPTER 6 Economic Growth 135
CHAPTER 7 Finance, Saving, and Investment 163
CHAPTER 8 Money, the Price Level, and
Inflation 183
CHAPTER 9 The Exchange Rate and the Balance of
Payments 213

xi

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This page intentionally left blank
 Flexibility
ALTERNATIVE PATHWAYS THROUGH THE CHAPTERS
◆
Chapter 1 Chapter 6

What Is Economics? Economic Growth

Chapter 2 Chapter 7 Chapter 13

The Economic Problem Finance, Saving, Fiscal Policy

and Investment

Chapter 3 Chapter 4
Chapter 10 Chapter 12
Demand and Supply Monitoring the Value Aggregate Supply and
of Production: GDP Aggregate Demand The Business Cycle,
Inflation, and Deflation

Chapter 15 Chapter 5
Chapter 7
International Monitoring Jobs Chapter 14
Trade Policy and Inflation Finance, Saving,
Monetary Policy
and Investment

Chapter 8

Money, the Price Level,

and Inflation

Chapter 9

The Exchange Rate and

the Balance of Payments

Chapter 11

Expenditure Multipliers

Start here ... … then jump to … and jump to any of these after
any of these … doing the prerequisites indicated

xiii

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This page intentionally left blank
 PART ONE
DETAILED CONTENTS

APPENDIX Graphs in Economics  17

◆
INTRODUCTION 1 Graphing Data 17
Graphing Economic Data 18
CHAPTER 1 ◆ WHAT IS ECONOMICS? 1 Scatter Diagrams 18

Definition of Economics 2 Graphs Used in Economic Models 20

Two Big Economic Questions 3
What, How, and For Whom? 3
Do Choices Made in the Pursuit of Self-Interest
also Promote the Social Interest? 5
The Economic Way of Thinking 9
A Choice Is a Tradeoff 9
Making a Rational Choice 9
Benefit: What You Gain 9
Cost: What You Must Give Up 9
How Much? Choosing at the Margin 10
Choices Respond to Incentives 10
Economics as Social Science and Policy Tool 11
Economist as Social Scientist 11
Economist as Policy Adviser 11
Variables That Move in the Same Direction 20
Variables That Move in Opposite Directions 21
Variables That Have a Maximum or a
Minimum 22
Variables That Are Unrelated 23
The Slope of a Relationship 24
The Slope of a Straight Line 24
The Slope of a Curved Line 25
Graphing Relationships Among More Than
Two Variables 26
Ceteris Paribus 26
When Other Things Change 27
MATHEMATICAL NOTE
Equations of Straight Lines   28

Economists in the Economy 12 ■■ AT ISSUE, 8

Jobs for an Economics Major 12 ■■ ECONOMICS IN THE NEWS, 6, 14
Will Jobs for Economics Majors Grow? 12
Earnings of Economics Majors 13
Skills Needed for Economics Jobs 13

Worked Problem, Summary (Key Points and Key Terms),

Study Plan Problems and Applications, and Additional Prob-
lems and Applications appear at the end of each chapter.

xv

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 xvi DETAILED CONTENTS

CHAPTER 2 ◆ THE ECONOMIC PROBLEM 33 CHAPTER 3 ◆ DEMAND AND SUPPLY 57

Production Possibilities and Opportunity Cost 34 Markets and Prices 58
Production Possibilities Frontier 34
Demand 59
Production Efficiency 35
The Law of Demand 59
Tradeoff Along the PPF 35
Demand Curve and Demand Schedule 59
Opportunity Cost 35
A Change in Demand 60
Using Resources Efficiently 37 A Change in the Quantity Demanded Versus a
The PPF and Marginal Cost 37 Change in Demand 62
Preferences and Marginal Benefit 38
Supply 64
Allocative Efficiency 39
The Law of Supply 64
Gains from Trade 40 Supply Curve and Supply Schedule 64
Comparative Advantage and Absolute A Change in Supply 65
Advantage 40 A Change in the Quantity Supplied Versus a
Achieving the Gains from Trade 42 Change in Supply 66
The Liz–Joe Economy and Its PPF 44
Market Equilibrium 68
Economic Growth 45 Price as a Regulator 68
The Cost of Economic Growth 45 Price Adjustments 69
A Nation’s Economic Growth 46
Predicting Changes in Price and Quantity 70
Changes in What We Produce 46
An Increase in Demand 70
Economic Coordination 48 A Decrease in Demand 70
Firms 48 An Increase in Supply 72
Markets 48 A Decrease in Supply 72
Property Rights 48 Changes in Both Demand and Supply 74
Money 48
MATHEMATICAL NOTE
Circular Flows Through Markets 48
Demand, Supply, and Equilibrium   78
Coordinating Decisions 49
■■ ECONOMICS IN THE NEWS, 71, 73, 76
■■ ECONOMICS IN ACTION, 46

■■ ECONOMICS IN THE NEWS, 36, 50 PART ONE WRAP-UP ◆

Understanding the Scope of Economics

Your Economic Revolution 85
Talking with
Esther Duflo 86

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PART TWO
MONITORING MACROECONOMIC
PERFORMANCE 87
CHAPTER 4 ◆ MONITORING THE VALUE
OF PRODUCTION: GDP 87
Gross Domestic Product 88
GDP Defined 88
GDP and the Circular Flow of Expenditure
and Income 89
Why Is Domestic Product “Gross”? 90
Measuring Canada’s GDP 91
The Expenditure Approach 91
The Income Approach 92
Nominal GDP and Real GDP 93
Calculating Real GDP 93
The Uses and Limitations of Real GDP 94
The Standard of Living over Time 94
The Standard of Living Across Countries 96
Limitations of Real GDP 97
APPENDIX Graphs in Macroeconomics   102
The Time-Series Graph 102
Making a Time-Series Graph 102
Reading a Time-Series Graph 102
Ratio Scale Reveals Trend 103
A Time-Series with a Trend 103
Using a Ratio Scale 103
MATHEMATICAL NOTE
Chained-Dollar Real GDP   104
■■ ECONOMICS IN ACTION, 99
■■ AT ISSUE, 98
■■ ECONOMICS IN THE NEWS, 100
A01_PARK6837_10_SE_FM.indd 17
DETAILED CONTENTS    xvii
CHAPTER 5 ◆ MONITORING JOBS
AND INFLATION 111
Employment and Unemployment 112
Why Unemployment Is a Problem 112
Labour Force Survey 113
Four Labour Market Indicators 113
Other Definitions of Unemployment 115
Most Costly Unemployment 116
Alternative Measures of Unemployment 116
Unemployment and Full Employment 117
Frictional Unemployment 117
Structural Unemployment 117
Cyclical Unemployment 117
“Natural” Unemployment 117
Real GDP and Unemployment over
the Cycle 118
The Changing Natural Unemployment Rate 119
The Price Level, Inflation, and Deflation 120
Why Inflation and Deflation Are Problems 120
The Consumer Price Index 121
Reading the CPI Numbers 121
Constructing the CPI 121
Measuring the Inflation Rate 122
Distinguishing High Inflation from a High
Price Level 123
The Biased CPI 123
The Magnitude of the Bias 124
Some Consequences of the Bias 124
Alternative Price Indexes 124
Core Inflation 124
The Real Variables in Macroeconomics 125
■■ ECONOMICS IN ACTION, 112, 118
■■ ECONOMICS IN THE NEWS, 126
PART TWO WRAP-UP ◆
Monitoring Macroeconomic Performance
The Big Picture 133
Talking with
David Card 134
07/12/17 1:01 PM
 xviii DETAILED CONTENTS

CHAPTER 7 ◆ FINANCE, SAVING, AND

PART THREE
MACROECONOMIC TRENDS 135
CHAPTER 6 ◆ ECONOMIC GROWTH 135
The Basics of Economic Growth 136
Calculating Growth Rates 136
Economic Growth Versus Business Cycle
Expansion 136
The Magic of Sustained Growth 137
Applying the Rule of 70 138
Long-Term Growth Trends 139
Long-Term Growth in Canada 139
Real GDP Growth in the World Economy 140
INVESTMENT 163
Financial Markets and Financial
Institutions 164
Finance and Money 164
Physical Capital and Financial Capital 164
Capital and Investment 164
Wealth and Saving 164
Financial Capital Markets 165
Financial Institutions 166
Insolvency and Illiquidity 167
Interest Rates and Asset Prices 167
Funds that Finance Investment 168
The Real Interest Rate 169

How Potential GDP Grows 142 The Loanable Funds Market 170
What Determines Potential GDP? 142 The Demand for Loanable Funds 170
What Makes Potential GDP Grow? 144 The Supply of Loanable Funds 170
Equilibrium in the Loanable Funds Market 171
Why Labour Productivity Grows 147 Changes in Demand and Supply 172
Preconditions for Labour Productivity
Government in the Loanable Funds Market 174
Growth 147
Physical Capital Growth 147 A Government Budget Surplus 174
Human Capital Growth 148 A Government Budget Deficit 174
Technological Advances 148 ■■ ECONOMICS IN ACTION, 169, 172
Is Economic Growth Sustainable? Theories, ■■ ECONOMICS IN THE NEWS, 176
Evidence, and Policies 151
Classical Growth Theory 151
Neoclassical Growth Theory 151
New Growth Theory 152
New Growth Theory Versus Malthusian
Theory 154
Sorting Out the Theories 154
The Empirical Evidence on the Causes of
Economic Growth 154
Policies for Achieving Faster Growth 154
■■ ECONOMICS IN ACTION, 141, 148, 149

■■ ECONOMICS IN THE NEWS, 150, 156

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CHAPTER 8 ◆ MONEY, THE PRICE LEVEL,
AND INFLATION 183
What Is Money? 184
Medium of Exchange 184
Unit of Account 184
Store of Value 185
Money in Canada Today 185
Depository Institutions 187
Types of Depository Institutions 187
What Depository Institutions Do 187
Economic Benefits Provided by Depository
Institutions 188
How Depository Institutions Are Regulated 188
Financial Innovation 190
The Bank of Canada 191
Banker to Banks and Government 191
Lender of Last Resort 191
Sole Issuer of Bank Notes 191
The Bank of Canada’s Balance Sheet 191
The Bank of Canada’s Policy Tools 192
How Banks Create Money 194
Creating Deposits by Making Loans 194
The Money Creation Process 195
The Money Multiplier 196
The Money Market 198
The Influences on Money Holding 198
The Demand for Money 199
Shifts in the Demand for Money Curve 199
Money Market Equilibrium 200
The Quantity Theory of Money 202
MATHEMATICAL NOTE
The Money Multiplier   206
■■ ECONOMICS IN ACTION, 185, 190, 192, 196, 202
■■ AT ISSUE, 189
■■ ECONOMICS IN THE NEWS, 197, 204
A01_PARK6837_10_SE_FM.indd 19
DETAILED CONTENTS    xix
CHAPTER 9 ◆ THE EXCHANGE RATE AND THE
BALANCE OF PAYMENTS 213
The Foreign Exchange Market 214
Trading Currencies 214
Exchange Rates 214
Questions About the Canadian Dollar
Exchange Rate 214
An Exchange Rate Is a Price 214
The Demand for One Money Is the Supply
of Another Money 215
Demand in the Foreign Exchange Market 215
Demand Curve for Canadian Dollars 216
Supply in the Foreign Exchange Market 217
Supply Curve for Canadian Dollars 217
Market Equilibrium 218
Changes in the Demand for Canadian
Dollars 218
Changes in the Supply of Canadian Dollars 219
Changes in the Exchange Rate 220
Arbitrage, Speculation, and Market
Fundamentals 222
Arbitrage 222
Speculation 223
Market Fundamentals 224
Exchange Rate Policy 225
Flexible Exchange Rate 225
Fixed Exchange Rate 225
Crawling Peg 226
Financing International Trade 228
Balance of Payments Accounts 228
Borrowers and Lenders 230
The Global Loanable Funds Market 230
Debtors and Creditors 231
Is Canadian Borrowing for Consumption? 231
Current Account Balance 232
Net Exports 232
Where Is the Exchange Rate? 233
■■ ECONOMICS IN ACTION, 215, 221, 223, 226,
229, 233
■■ ECONOMICS IN THE NEWS, 234
PART THREE WRAP-UP ◆
Understanding Macroeconomic Trends
Expanding the Frontier 241
Talking with
Xavier Sala-i-Martin 242
07/12/17 1:01 PM
 xx DETAILED CONTENTS
PART FOUR
MACROECONOMIC FLUCTUATIONS 243
CHAPTER 10 ◆ AGGREGATE SUPPLY AND
AGGREGATE DEMAND 243
Aggregate Supply 244
Quantity Supplied and Supply 244
Long-Run Aggregate Supply 244
Short-Run Aggregate Supply 245
Changes in Aggregate Supply 246
Aggregate Demand 248
The Aggregate Demand Curve 248
Changes in Aggregate Demand 249
Explaining Macroeconomic Trends and
Fluctuations 252
Short-Run Macroeconomic Equilibrium 252
Long-Run Macroeconomic Equilibrium 252
Economic Growth and Inflation in
the AS-AD Model 253
The Business Cycle in the AS-AD Model 254
Fluctuations in Aggregate Demand 256
Fluctuations in Aggregate Supply 257
Macroeconomic Schools of Thought 258
The Classical View 258
The Keynesian View 258
The Monetarist View 259
The Way Ahead 259
■■ ECONOMICS IN ACTION, 250, 253, 254
■■ ECONOMICS IN THE NEWS, 260
A01_PARK6837_10_SE_FM.indd 20
CHAPTER 11 ◆ EXPENDITURE
MULTIPLIERS 267
Fixed Prices and Expenditure Plans 268
Expenditure Plans 268
Consumption and Saving Plans 268
Marginal Propensities to Consume and Save 270
Slopes and Marginal Propensities 270
Consumption as a Function of Real GDP 271
Import Function 271
Real GDP with a Fixed Price Level 272
Aggregate Planned Expenditure 272
Actual Expenditure, Planned Expenditure, and
Real GDP 273
Equilibrium Expenditure 274
Convergence to Equilibrium 275
The Multiplier 276
The Basic Idea of the Multiplier 276
The Multiplier Effect 276
Why Is the Multiplier Greater Than 1? 277
The Size of the Multiplier 277
The Multiplier and the Slope of
the AE Curve 278
Imports and Income Taxes 279
The Multiplier Process 279
Business Cycle Turning Points 280
The Multiplier and the Price Level 281
Adjusting Quantities and Prices 281
Aggregate Expenditure and Aggregate
Demand 281
Deriving the Aggregate Demand Curve 281
Changes in Aggregate Expenditure and
Aggregate Demand 282
Equilibrium Real GDP and the Price Level 283
MATHEMATICAL NOTE
The Algebra of the Keynesian Model   288
■■ ECONOMICS IN ACTION, 271, 280
■■ ECONOMICS IN THE NEWS, 286
07/12/17 1:01 PM

CHAPTER 12 ◆ THE BUSINESS CYCLE,
INFLATION, AND
DEFLATION 297
The Business Cycle 298
Mainstream Business Cycle Theory 298
Real Business Cycle Theory 299
Inflation Cycles 303
Demand-Pull Inflation 303
Cost-Push Inflation 305
Expected Inflation 307
Forecasting Inflation 308
Inflation and the Business Cycle 308
Deflation 309
What Causes Deflation? 309
What Are the Consequences of Deflation? 311
How Can Deflation Be Ended? 311
The Phillips Curve 312
The Short-Run Phillips Curve 312
The Long-Run Phillips Curve 312
■■ ECONOMICS IN ACTION, 300, 310, 313
■■ ECONOMICS IN THE NEWS, 314
PART FOUR WRAP-UP ◆
Understanding Macroeconomic Fluctuations
Boom and Bust 321
Talking with
Peter Howitt 322
A01_PARK6837_10_SE_FM.indd 21
DETAILED CONTENTS    xxi
PART FIVE
MACROECONOMIC POLICY 323
CHAPTER 13 ◆ FISCAL POLICY 323
The Federal Budget 324
Budget Making 324
The Federal Budget in 2016 324
The Budget in Historical Perspective 325
Supply-Side Effects of Fiscal Policy 330
Full Employment and Potential GDP 330
The Effects of the Income Tax 330
Taxes on Expenditure and the Tax Wedge 331
Taxes and the Incentive to Save and Invest 332
Tax Revenues and the Laffer Curve 333
The Supply-Side Debate 333
Fiscal Stimulus 334
Automatic Fiscal Policy and Cyclical and
Structural Budget Balances 334
Discretionary Fiscal Stimulus 335
■■ ECONOMICS IN ACTION, 328, 329, 331, 336,
337, 338
■■ ECONOMICS IN THE NEWS, 340
07/12/17 1:01 PM
 xxii DETAILED CONTENTS
CHAPTER 14 ◆ MONETARY POLICY 347
Monetary Policy Objectives and Framework 348
Monetary Policy Objective 348
Responsibility for Monetary Policy 349
The Conduct of Monetary Policy 350
The Monetary Policy Instrument 350
The Bank’s Interest Rate Decision 351
Hitting the Overnight Loans Rate Target 351
Monetary Policy Transmission 353
Quick Overview 353
Interest Rate Changes 353
Exchange Rate Fluctuations 354
Money and Bank Loans 355
The Long-Term Real Interest Rate 355
Expenditure Plans 355
Change in Aggregate Demand, Real GDP,
and the Price Level 356
The Bank of Canada Fights Recession 356
The Bank of Canada Fights Inflation 358
Loose Links and Long and Variable Lags 359
Financial Crisis: Cure and Prevention 361
The Anatomy of the Financial Crisis 361
The U.S. Fed’s Policy Actions 361
Congress Crisis Policy Action 361
Macroprudential Regulation 362
Canadian Macroprudential Policy 362
Policy Strategies and Clarity 362
■■ ECONOMICS IN ACTION, 360, 363
■■ ECONOMICS IN THE NEWS, 364
A01_PARK6837_10_SE_FM.indd 22
CHAPTER 15 ◆ INTERNATIONAL TRADE
POLICY 371
How Global Markets Work 372
International Trade Today 372
What Drives International Trade? 372
Why Canada Imports T-Shirts 373
Why Canada Exports Regional Jets 374
Winners, Losers, and the Net Gain from Trade 375
Gains and Losses from Imports 375
Gains and Losses from Exports 375
Gains for All 375
International Trade Restrictions 376
Tariffs 376
Import Quotas 378
Other Import Barriers 381
Export Subsidies 381
The Case Against Protection 382
Helps an Infant Industry Grow 382
Counteracts Dumping 382
Saves Domestic Jobs 382
Allows Us to Compete with Cheap Foreign
Labour 382
Penalizes Lax Environmental Standards 383
Prevents Rich Countries from Exploiting
Developing Countries 383
Reduces Offshore Outsourcing That Sends Good
Canadian Jobs to Other Countries 383
Avoiding Trade Wars 384
Why Is International Trade Restricted? 384
Compensating Losers 385
■■ ECONOMICS IN ACTION, 372, 377, 378
■■ AT ISSUE, 384
■■ ECONOMICS IN THE NEWS, 380, 386
PART FIVE WRAP-UP ◆
Understanding Macroeconomic Policy
Tradeoffs and Free Lunches 393
Talking with
Pierre Siklos 394
Glossary G-1
Index I-1
Credits C-1
07/12/17 1:01 PM
 ◆ New To This Edition
the price Level, Inflation, and Deflation
Chapter 5 now includes the three new measures of
PREFACE
◆ 125

core inflation: CPI-trim, CPI-median, and CPI-common.

All data figures, tables, and explanations thoroughly
inflation
­updated to therate. Theavailable;
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fivecore
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ges; 21 new Economics in the News items based
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8

problems andrate
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tribution an the
rates and entirely new section,
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thinking, analytical, math, writing, and oral communica- basket.
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in economics.
most common price changes. –2
Figure 5.8 shows the CPI and CPI-trim core infla- 1990 1995 2000 2005 2010 2015 2020
ors tion rates from 1984 to 2017. Year
ry a lot depend- FIGURE 1.3 Earnings of Economics Majors
the core inflation rate is the CpI-trim measure, which excludes
alifications. The Chapter 7, Finance, Saving, and Investment, has
s a pay range for The Real Variables in Macroeconomics
Economics
the top and bottom 20 percent of the most extreme price
been reorganized and streamlined with less emphasis
changes. the core inflation rate removes most of the wide
4,441 to $127,500, You saw in Chapter 3 the distinction between
Political science onswings
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the CpI inflation rate because it removes the most
a money price and a relative price (see p. 58). current extremely low real interest rate.
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$100,000 a year by between a real variable and its corresponding nomi- MyLab
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REVIEW QUIZ
and range from an choices. And we want to distinguish a real quantity Economics in the News
ket research analysts (like Business
real GDP) from a nominal quantity (like nomi- 1 What is the price level?
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d job? Five skill is the price of labour. We measure the economy’s real Work these questions in Study Plan 5.3 and
March 27, 2017

wage rate as the nominal wage rate divided by the get instant
facility onfeedback. MyLab Economics
A First Nation on Vancouver Island has approved a proposed liquefied natural gas export
its traditional territories.
Chapter
GDP 2 has a new section prompted by the ongo-
can deflator.
Leaders of the Huu-ay-aht First Nation and the CEO of Vancouver-based Steelhead LNG
You see these skills at work (except the held a joint news conference in Vancouver on Monday to announce what Chief Robert Dennis

ing concernThere about

last one) in theisforecasts
onethevariable
rust-belt
of that
economy,
is a bit
the BLS
its causes
different—an
economists
said was the First Nation’s “official entry into the international business world.”
Members of the small First Nation voted Saturday to approve development of the LNG facil-

and cures,
patterns
which
rate. describes
A real and
described earlier. These economists used atheir
interest interest illustrates
rate is not the changing
nominal ◆ You’ve now completed your study of the mea-
ity at Sarita Bay, on the west coast of Vancouver Island …
The company’s plans could even include building a new pipeline linking Vancouver Island and

critical-thinking skills to focus on a manageableand

of
interest production
rate divided as an
by economy
the price expands,
level. You’ll learn surement of macroeconomic performance. Your next
the B.C. mainland …
The company planned to make a final investment decision

how
explains howto adjust
technicalinterest
changerates
number of key features of jobs. They went on andfor inflation
economic to find
growth a real task is to learn what determines that performance
on Sarita Bay by 2019 or 2020, with first production tar-
geted for 2024, he said. …
ESSENCE OF THE STORY
first interest
shrinks
to gather rateshare
the
relevant indata
Chapter
ofon 8. But allas
agriculture
earnings the
and other real vari-
manufacturing
employ- and how policy actions might improve it. But first,
John Jack, executive councillor with the Huu-ay-aht, said
it’s time the First Nation took its place within Canada and ■ the Huu-ay-aht First Nation on Vancouver Island
has approved a liquefied natural gas export facil-

mentables aof macroeconomics arecategories,

calculated by dividingas a compare the Canadian and U.S. labour markets in
British Columbia.

expands forand later

large shrinks the
number share
of jobs of manufacturing “This is an example of a First Nation working with busi- ■
ity on its traditional territories.
Steelhead LNG will build and operate the facility.

nominal
services
analyzedexpand. variable by the price level.
the data using their math and economics Economics in the News on pp. 126–127.
ness and working with the people of B.C. and Canada in
order to create value that fits both of our interests.”
■ A new pipeline linking Vancouver Island and the
B.C. mainland is a possible part of the plan.

ty to clarify and tools,Chapter

and predicted future jobs growth. They
© The Canadian Press ■ production is targeted to start in 2024.

evant evidence 2 also has an expanded explanation and

then presented
graphical their findings
derivation online at https://
of the outward-bowed PPF. MyLab Economics Economics in the News

www.bls.gov/ooh. Round off this topic by taking

nomic ideas and a look at their work. xxiii
rns, and reach a

50

thematical and M05_PARK6837_10_SE_C05.indd 125 13/09/17 1:50 PM

reach valid REVIEW QUIZ M02_PARK6837_10_SE_C02.indd 50 09/09/17 11:09 AM

A01_PARK6837_10_SE_FM.indd 23 07/12/17 1:01 PM

1 What types of jobs do economists do?
 xxiv PREFACE

News-Based Problems and Applications
Just a sample of the topics covered in the 80 new
news-based problems and applications include:
Shrinking brick-and-mortar retail and expanding
­online shopping; Canada’s economic growth triples
U.S.’s; jobs data highlights divergence between
Canada, U.S.; thousands of robots improve human
efficiency; after a summer bond binge, signs of
angst are growing in the market; Poloz’s best option:
increase the money supply; Bank of Canada raises
benchmark rate to 1%; and U.S. tariffs on Canadian
softwood lumber.
◆ Solving Teaching and Learning
Challenges
To change the way students see the world: this is our
goal in teaching economics, in writing this book, and
in playing a major role in creating content for MyLab
Economics.
Three facts about students are our guiding
and not as a series of logical exercises with no real
purpose. Economics in the News and At Issue are
designed to achieve this goal.
Each chapter opens with a student-friendly
vignette that raises a question to motivate and focus
the chapter. The chapter explains the principles, or
model, that address the question and ends with an
Economics in the News application that helps students
to think like economists by connecting chapter tools
and concepts to the world around them. All these
news exercises are in MyLab with instant targeted
feedback and auto-grading and constant uploading
of new, current exercises.
In many chapters, an additional briefer Economics
in the News (shown here) presents a short news clip,
supplemented by data where needed, poses some
questions, and walks through the answers.
predicting Changes in price and Quantity 73
ECONOMICS IN ThE NEWS
The Market for Vanilla Bean
Price of Ice Cream Set to Spike
A poor harvest in Madagascar has exploded the price of
vanilla bean, the flavouring in Canada’s top ice cream.

principles. First, they want to learn, but they are Source: The Toronto Star, April 7, 2016

overwhelmed by the volume of claims on their time THE DATA

Quantity of Vanilla Bean Price of Vanilla Bean

and energy. So, they must see the relevance to their Year
(billions of tonnes
per year )
(dollars
per kilogram)

lives and future careers of what they are being asked 2015
2016
7.6
5.6
70
425

to learn. Second, students want to get it, and get it THE QUESTIONS

quickly. So, they must be presented with clear and ■

succinct explanations. And third, students want to
make sense of today’s world and be better prepared
for life after school. So, they must be shown how to
apply the timeless principles of economics and its
models to illuminate and provide a guide to under-
■
What does the data table tell us?
Why did the price of vanilla bean rise? Is it because ■ In 2016, the decreased production in Madagasscar
demand changed or supply changed, and in which
direction? ■
decreased the supply of vanilla bean to S16.
The price increased to $425 per kilogram and the
THE ANSWERS ■
quantity traded decreased to 5.6 billion tonnes.
The higher price brought a decrease in the quantity of
■ The data table tells us that during 2016, the quantity
of vanilla bean produced increased and the price of
vanilla bean demanded, which is shown by the move-
ment along the demand curve.
■
vanilla bean increased sharply.
An increase in demand brings an increase in the quan-
Price (dollars per kilogram)

tity and a rise in the price. S16

Poor harvest decreases the
■ A decrease in supply brings a decrease in the quantity 700 supply of vanilla bean ...

standing today’s events and issues, and the future ■

and a rise in the price.
Because the quantity of vanilla bean decreased and the 600
S15

challenges they are likely to encounter. price increased, there must have been a decrease in the
supply of vanilla bean
500

The organization of this text and MyLab arise ■ The supply of vanilla bean decreases if a poor harvest
decreases production.
425
... and the

directly from these guiding principles. Each chapter ■ The news clip says there was a poor harvest in
Madagascar. This decrease in production brought
300
quantity
demanded
decreases

begins with a clear statement of learning objectives ■

a decrease in the supply of vanilla bean.
The figure illustrates the market for vanilla bean in
200 ... the
price
rises ...

that correspond to each chapter section. 2015 and 2016. The demand curve D shows the
demand for vanilla bean.
70
D

The learning resources also arise directly from ■ In 2015, the supply curve was S15, the price was $70
per kilogram, and the quantity of vanilla bean traded
0 5.6 7.6
Quantity (billions of tonnes per year)

the three guiding principles, and we will describe was 7.6 billion tonnes. The Market for Vanilla Bean in 2015–2016

them by placing them in five groups: MyLab Economics Economics in the News

■■ Making economics real CAN10E - EIN_03_002

■■ Learning the vocabulary Four At Issue boxes engage the student in

■■ Seeing the action and telling the story debate and controversy. An At Issue box introduces
■■ Learning interactively—learning by doing an issue and then presents two opposing views.
M03_PARK6837_10_SE_C03.indd 73 09/09/17 12:04 PM

It leaves the matter unsettled so that students and

■■ MyLab Economics the instructor can continue the argument in class
and reach their own conclusions.
Making Economics Real Economics in Action boxes make economics real
The student needs to see economics as a lens that by providing data and information that links models
sharpens the focus on real-world issues and events, to real-world economic activity. Some of the issues

A01_PARK6837_10_SE_FM.indd 24 07/12/17 1:01 PM

Another random document with
no related content on Scribd:
to good books and good horses, pursuits which met the approval of
his father-in-law as being the “tastes of a gentleman.”
John Fenley did not show his usual foresight, certainly, in
encouraging Roderick to be in the business and not of it; but then he
confidently expected to live to settle up all his own affairs, and turn
his large fortune into a shape in which it would be more easily
managed than in its primitive form of timber lands and sawmills. No
one could have anticipated his death, which occurred in the prime of
his active life, some five years after his daughter’s marriage.
Even then his son-in-law hardly took the position expected of him.
His long habit of standing aside was not easily overcome, and Mrs.
Le Garde, who had a taste for affairs, and Mr. Rogers, her father’s
private secretary, had actually more to do with certain important
transactions than the nominal head of the business.
One of these transactions was as follows:
“Mrs. Le Garde,” said Mr. Rogers, being shown into the library one
chilly afternoon in early October, “Macomb has cabled from Vienna
to his agent here to close with us for that tract of Michigan timber,
paying the price agreed upon for cash. I have had the papers ready
for some time, and they only want signing. If you can come down
town at once——”
Virginia looked down at her tea-gown, and then at the cheerful
little fire on the hearth, and her novel lying face downward on the
easiest chair.
“Won’t to-morrow morning do as well?” she asked, languidly.
“If you will permit me to say so, by no means, Mrs. Le Garde,” said
Mr. Rogers, suavely.
Something in his manner attracted her attention.
“Why not?” she demanded.
Mr. Rogers looked at the fire for a moment before replying. “You
wish to realize upon the land, you see,” he observed, vaguely. “The
cablegram was received this morning. Macomb’s agent has no
choice but to act on it now. By to-morrow, or next day at the farthest,
there may be reasons apparent which would justify him in declaring
the deal off. It is worth your while, and it should be made worth
mine,” said Mr. Rogers, leaning upon the words, “to see that the
matter is settled this afternoon. I have private advices that forest fires
have started in northern Michigan—ah—somewhat in this vicinity,
and their spread is greatly to be feared. I have not mentioned this to
Mr. Le Garde.”
Mrs. Le Garde hesitated a moment. It would be charitable to
suppose that she did not understand the situation so lightly sketched
in, but I am afraid she did. Mr. Rogers did not raise his eyes.
“Oh, well,” she said, carelessly, “to-day or to-morrow, it doesn’t
signify. If you will have a notary and Macomb’s agent at Mr. Le
Garde’s office in half an hour, Mr. Rogers, I will be there.”
So it was that the papers were executed and payment made that
afternoon. The next day but one, “Forest Fires. Danger to Lumber
Interests in Michigan,” was a prominent head-line in the morning
papers.
When Macomb came home from Vienna to look after his own
affairs a month later he found himself the owner of a diminished
bank account and some hundreds of acres of smoking pine-stumps.
He made a trip to northern Michigan to survey these latter
possessions, and while there succeeded in securing some
interesting statements which it pleased him to call “facts.” Armed with
these, he went to Roderick Le Garde, and laid his case before him.
“First of all, I want to say that I have always thought you an honest
man, Le Garde,” he observed, “and I wish to say that I am bringing
no personal accusations, though the case looks black for you. But I
know your man Rogers is a d——d scoundrel, though I fail to see
how the sale could profit him, apart from its advantages to you. But
you will see I have proof that he was well-informed on the day the
transfer took place that that tract of timber was already on fire in a
dozen places, and nothing on earth could save it from destruction. I
call that obtaining money under false pretences, and I warn you if
you don’t desire to repurchase the entire tract at the price I paid for
it, that I propose to see at once what the courts will call it.”
“Much obliged for your good opinion of me,” said Le Garde, dryly.
“I have perfect confidence in Rogers”—this was not strictly true, but
Roderick was angry—“and none at all in your so-called ‘proofs.’ I
shall do a little investigating for myself. If I find, as I believe, that
Rogers had no other information in the matter than I myself
possessed, and that you have met with your losses only in the
ordinary course of events, you may bring as many suits as you like,
and rest assured that the Fenley estate will fight them to the last
dollar. If it is otherwise—but nothing else is possible! Good-morning,
sir.”

III
“Virginia! Do you mean that Rogers actually approached you in the
matter?”
Mrs. Le Garde moved uneasily under the scorching light in her
husband’s eyes. It was a new experience to see anything but
tenderness in his face, but she respected him for the look she
resented.
“He had to consult some one, of course. You have given no
attention to things of late.” Her voice was irritatingly even. “Papa
always said you had no head for business.”
“Your father was an honest man, Virginia,” cried her husband,
desperately. “He would have been the last person in the world to
attempt to increase his gains dishonestly.”
“I see nothing dishonest about it,” said Virginia, coldly. “I really
think, Roderick, under all the circumstances, it would have been
more appropriate if you had learned something about money in the
last seven years—besides how to spend it.”
Nothing dishonest!
 “Don’t you understand,” demanded Le Garde, in a terrible voice,
“that the ‘commission’ you paid Rogers was blackmail, the price of
his ‘news’ and his silence?”
Mrs. Le Garde shrugged her shoulders.
Roderick rose dumbly. He knew all that he need. The room whirled
round him. How he made his way out of the house he did not know.
Had he served seven years—for this? The fair house of his life, built
up on the insubstantial foundations of a woman’s silence and her
sweet looks, was tumbling about his ears. She whom he had made
his wife, who wore the name he honored though it was his own,
whom he had worshipped as woman never yet was worshipped, had
failed in common honesty, and taunted him with the life he had led
for her sake. She had betrayed him into a shameful position. That
restitution was an easy matter and might be a secret one did not
make the case less hard. He could have defended her had she been
disgraced in the world’s eyes, but how might he defend her from
himself?
It was a raw November night. As he went swiftly on, he felt the
river-mists sweep soft against his face. He wrung his helpless hands.
“Oh, God! It is dishonor! What shall I do? What shall I do?”
No help in the murky sky above him; none in the home whose
lights lay behind; none in the river that rushed along beneath the
bluff—that was the refuge of a coward and a shirk. Had he not
already shirked too much in life?
What must he do? He tried to think collectedly, but in his pain he
could not. There were visions before his eyes. He saw Virginia as
she had seemed to him seven years ago—five years—yesterday—
to-night. Was it true that he had never really seen her till to-night?
Oh, that brave, lost youth of his! His strong, light-hearted youth,
with its poverty, its pride, and its blessed, blessed freedom! If he
could but go back to it, and feel himself his own man once more, with
his life before him to be lived as he had planned it. How was it that
he had become entangled with a soul so alien to his own? And what
did a man do when he reached a point from which he could not go
back, yet loathed to go forward?
He tramped on and on through the drizzling November darkness.
Gradually the tumult in his heart was stilled. He became aware that
the air was cold, that he was splashed with mud and rain, that he
had no hat, and wore only thin evening clothes. He turned at last, his
teeth chattering in his head, and plodded back.
Two things grew clear before his mind—he must settle with
Macomb to-morrow, and he must henceforth assume the control of
John Fenley’s affairs which he had hitherto nominally possessed.
Thank Heaven for the gift of work!
And Virginia?
Who was it who said that for our sins there was all forgiveness, but
our mistakes even infinite mercy could not pardon? Virginia was a
mistake of his; that was all. It was safer to blame himself, not her—
not her. That way lay madness.
Perhaps she, too, had found herself mistaken. Was that the secret
he sometimes fancied he saw stirring behind the curtain of her placid
eyes? If so, God pity them; and God help him to play the part he had
to play.
He had reached his own threshold, and his latch-key faltered in
the door. As he stepped into the wide hall, a curious figure in the
disarray of his fastidious attire, he caught the odor of roses—they
were Maréchal Niels—floating out of the drawing-room. The rooms
were warm and bright and sweet, but their cheer seemed to him
oppressive, and he sickened at the faint perfume of the roses.
His wife came and put the portière aside, standing with one white,
lifted arm outlined against its heavy folds. Virginia always wore
simple evening dress at home for her husband. She had been heard
to say that it was one of the amenities that made domestic life
endurable.
“How long you have been out!” she said, in just her usual sweet,
unhurried voice, ignoring his dishevelled aspect. “I am afraid you are
quite chilled through.”
 He looked at her an instant curiously—this exquisite piece of flesh
and blood that was his second self for time and eternity—realizing
that he did not understand her, had never understood her, could
never hope nor desire to do so again. Then he gathered himself
together to make the first speech in the part he had appointed
hereafter to play—that rôle of devoted husband, whose cues he
knew by heart. As he spoke he was shivering slightly, but surely that
was because of the raw outer air.
“What a charming pose!” he said. “Did I ever tell you that
throughout Homer ‘white-armed’ is used as a synonyme for
beautiful?”
 RIVALS
“I didn’t presume to suppose that you could care for me yet,” said
Rollinson, humbly.
“I am not at all sure that I cannot,” said the girl, meditatively, “but,
then, neither am I at all sure that I can.” She looked at him with clear,
untroubled eyes as she spoke, eyes in which he read her interest,
her detachment, and her exquisite sincerity. She had not grown
fluttered or self-conscious over his avowal. She was a modern
woman, and she was young. Nothing had yet happened in her life to
disturb her conviction that this was a subject upon which one could
reason as upon other subjects. She was not emotional, and she
suspected that the poets were not unerring guides in matters of the
heart. She liked Rollinson very much, and she was willing to listen to
his arguments.
It seemed to her a little strange that he did not proceed with those
arguments at once, when suddenly she perceived that the adoration
in his eyes was intended as the chief of them, and this discovery was
so disconcerting that she blushed.
“I am twenty years older than you,” murmured Rollinson. As this
was the fact he most wished to forget, he felt it his duty to remind her
of it.
“Nineteen only,” she answered, calmly, “and, besides, I do not see
what that has to do with it. It is not the years but the man one
marries.”
“It is very good of you to think so,” he answered, still humbly, “and
since there is no one else you care for, perhaps in time—”
He left the sentence hanging in the air, as if afraid to finish it, and
neither this modesty nor the yearning tenderness of his accent was
lost upon the girl.
 “As you say, there is no one else.”
“But—but there might be,” suggested Rollinson, who was strongly
possessed by the insane delusion of the lover that all men must
needs worship his lady. “Bertha! If you are going to learn to love me,
make haste to be kind. I am horribly unreasonable. I see a rival in
every man you speak to, dance with, smile at. Until my probation is
over I should like to depopulate the world you move in. I want, at
least, to be rejected on my own demerits, not because of the merits
of another man!”
Bertha regarded him attentively, still with that serious, candid air.
“Indeed, I will try,” she murmured, and for the moment he wisely
said no more.
Rollinson had been a thoughtful youth, who early conceived of old
age—which he thought began between forty and forty-five—as one
of the most desirable periods of life.
“Patience! Afterwards,” he had said to himself during the storm
and stress, the confusion and uncertainty of youth—“afterwards,
when I am old, when all this fermentation has ceased, when I know
what I think, what I feel, what I want and can do, how glorious life will
be!”
And in accordance with this conception, as he advanced in years,
he looked confidently for the subsidence of the swelling tide of his
prejudices, passions, partialities, and for the emergence of reason
undefiled as the second Ararat upon which the long-tossed and
buffeted ark of his mind might rest.
To say the least, he was taken aback when, in the midst of those
ripe years, whose fruitage he had hoped to gather in great peace, he
came again upon tempestuous days. In brief, when past forty, it
befell him to love as he had never loved before, and with an unrest
far exceeding that of youth, for he could not fail to see that the
chances were by rights against him.
“Good Lord!” said Rollinson, when he faced his emotional
condition, “for the heart there is no afterwards!”
 But, happily, Bertha did not think so ill of his chances for
happiness as did he himself, and he ventured to hope, although he
was terrified by her calmness and her ability to see from all sides the
subject he could only see from one.
Bertha respected his learning and revered his wisdom—which is
learning hitched to life—and envied his experiences, and exulted in
his grasp of people and things, and in his breadth of vision. She
thought such a grip upon life as he possessed could only come with
years. And compared to these things the disadvantages which also
come with years seemed trifling. Obesity, baldness, and a touch of
ancestral gout were the penalties he had to pay for being what he
was. On the whole, the price did not seem too high. She felt quite
sure that she would ultimately accept him, and that they would marry
and live happily ever after.
This impression was still strong in her mind when, some days after
the conversation recorded, she went with her aunt to a little lunch-
party which he gave in his bachelor apartments.
Although he modestly spoke of them as being very simple,
Rollinson’s rooms were really a liberal education. He had been about
the world a great deal and had carried with him fastidious taste and a
purse only moderately filled. As he said once, he had never had so
much money that he could afford to buy trash. The result was very
happy. Pictures, rugs, draperies, brasses, ceramics, all were
satisfactory.
“Your things are so delightfully intelligent!” said Bertha, with a
gratified sigh. He found himself by her side as she was inspecting a
bit of antique silver on a cabinet with obvious approval. “It makes me
feel as I have never felt before, what a wonderful thing is taste!”
He smiled. “I am more than repaid if they have pleased you,” he
said. “Will you step this way an instant? I want to show you the thing
I am vain enough to value most of all.”
In the corner which he indicated, hung a picture she had not
noticed, the portrait of a young man about twenty-five. The girl stared
at it with fascinated eyes. “You! Can it be you?” she questioned, with
an accent that was almost a reproach. Ah, how splendid he was, the
painted youth in his hunter’s costume who stood there fixed forever
in all the beautiful insolence of his young manhood! What a mass of
dark hair tossed back from his fine forehead, and what soldierly
erectness in his bearing! How the eyes flashed—those eyes that
only twinkled now! He was radiant, courageous, strong. What a hold
he had on life—one read it in the lines of his mouth, in his eyes, his
brow. What zest, what eagerness of spirit! He was more than all that
she most admired in her lover, and he was young—young!
The girl gave a strange look at Rollinson and then turned back to
the picture again. All fulfilment is pitiful compared with its prophecy,
and in that moment she realized this.
“It was painted by my friend Van Anden, who died too early to
achieve the fame he should have had,” said Rollinson. “All that
toggery I am wearing, which paints so effectively, was part of my
outfit when I went to Africa with my cousin.”
“It is very fine,” said Bertha, with constraint, and then, with an
unmistakably final movement, she turned away from it. Rollinson felt
a sudden, wretched pang. If she cared at all for him, would not she
also exult in this fair presentment of his young years?
After the luncheon had been served and before his guests had
moved to go, he saw with a hopeful thrill that she had gone back to
the picture and was standing before it again, intent and questioning.
He went up to her.
“Bertha! Dearest!” he said, beneath his breath. “After all, you like
it, then?”
She turned upon him sharply. “It is wonderful—wonderful! But you
should not have shown it to me! I do not understand. I—I thought I
could have married you. Now I know that I never can. I—I never
dreamed there was youth like that in the world. Oh, why did you let
me find it out?”
Rollinson stood dumfounded.
 “But it is I,” he found voice to plead at last. “Bertha, have the
added years of worthy life made me less deserving of your love? Am
I to be punished for becoming what he only promised to be?”
The girl passed her hand over her eyes in a bewildered way.
“It seems to me that one can love promise better than
achievement,” she said, faintly. “To care for what is not, is, I fancy,
the very essence of love.”
“I love you as he never could have done,” urged Rollinson. “As he
never dreamed of caring for any one. His loves were superficial and
selfish, Bertha. I have gained much, and I have lost nothing that—
that is essential.”
“You have lost comprehension—he would have understood what I
mean,” answered the girl, quickly.
“But—Bertha! This is unreasonable. How can you expect me to
comprehend?”
“I have been too reasonable!” she cried, with sudden passion.
“That is my discovery. Love is not reasonable, youth is not—and they
belong together. Oh, don’t, don’t make me say any more!”
For an instant there was a heavy silence between them; then
Rollinson found voice to say:
“It shall be as you please. Your aunt seems to be looking for you.
Shall we go over to her?”
When his guests were gone at last, Rollinson came back to the
picture. He took it down and placed it upon a chair where the light fell
full upon it. Truly, he did not look like that to-day.
Although it was himself, he hated it, for it had cost him something
dearer than the young strength which it portrayed. Of all the irrational
humiliations of the long, wayward years of life this seemed to him the
most hideous.
He took his knife from his pocket, opened it and put the point
against the canvas. It would be easy to satisfy the brute anger in his
soul by two sharp cross-cuts which should effectually destroy that
remote, insolent beauty which had once been his own and now was
his no longer.
He hesitated a moment, then dropped the knife and shook his
head. He could not possibly do such a melodramatic, tawdry thing as
that.
He knew that the day might yet come when he should not
remember the bitterness of this hour; he might even grow to be glad
again that he had once walked the earth in the likeness of this
picture, but just now—just now he must forget it for awhile.
With one short sigh, Rollinson lifted the portrait of his rival and set
it down, the face against the wall.
 AT THE END OF THE WORLD

“And so, as kinsmen met a night,

We talked between the rooms,
Until the moss had reached our lips,
And covered up our names.”

She was sitting quietly in the sleeper, writing a letter to a friend.

She had got as far as “I feel it my duty to tell you,” when the pencil
flew out of her fingers. She had an instantaneous impression,
grotesque in its horror, that all the natural laws were being unsettled
with a terrible, grinding noise; for the pencil was falling toward the
ceiling instead of the floor, and the man in front of her was following
it, and even she herself. Then something struck her head and she
lost consciousness.
When she came to herself she was lying on a cot in one corner of
a large, unfamiliar room. As her gaze wandered slowly from object to
object on the whitewashed walls, she concluded, from the
combination of railway maps, time-cards, dusty windows filled with
geraniums in pots, and a large, rusty Bible chained to a wall-pocket,
that she was in a country railroad station; but when she turned her
head she saw that it also resembled a hospital. She felt bruised and
sore, but was not in much pain, and only an indefinable sensation of
great weakness warned her not to move.
Presently some one noticed that her eyes were open and, drawing
near, asked her some questions. She answered them with ease, and
then in her turn asked a few. The man, obviously a physician,
answered briefly but definitely. Then he drew a note-book from his
pocket, took down some addresses that she gave him, and moved
away softly in the direction of the telegraph window. She lay, looking
after him incredulously. So this was death! She had at farthest two
more hours on earth. It was part of her creed that one may permit
one’s self to be surprised but never startled. She was not startled
now, but, decidedly, she was sorry. Her best work was yet undone,
and she had not meant to leave earth while there still remained so
much to do.
The sounds and sights of the hastily improvised hospital were
unpleasant to her, and she turned her head away from them. There
was one cot between her and the corner. She recognized the profile
of that bandaged head as belonging to the man who had sat across
the aisle in the sleeper. She had jotted down a description of him in
her note-book, thinking she might use it some day. It ran:
“Sallow skin, soft, brown hair, fine eyes, but an iron mouth with a
devil-may-care expression. He has the get-up of a man who is too
busy being prosperous to take time to be comfortable. His face, a
singular combination of sensitiveness and stolidity, the latter leading.
Neither hard enough for this world nor tender enough for the next. An
Achilles with a dozen vulnerable spots, he sheds two drops of his
own blood for every one he draws in his battles; so, whether he wins
or not, they are always losing fields for him.”
She lay, looking at his profile, thinking that never, so long as she
lived, could she see the other side of that anguished countenance,
and the thought irritated her. This, she reflected, was an instance of
the strength of the ruling passion. She had always been thirstily
curious about life, even to its least details. Now the opportunities for
quenching that thirst were at an end. There was no more for her in
this world of that friction of spirit upon spirit which she loved. She
was dying in a corner. Between herself and the immensity of eternity
hung only that one white face.
Suddenly a thought came into her mind. Why should she not talk
to him—while she was waiting?
“Are you badly hurt?” she asked, softly.
He groaned. “I am a dead man.”
“They tell me I am dying, too,” she said. “Why have they put us
here in this corner, away from the others?”
 “Because neither of us is in great pain, and we are both hopeless
cases. They have no time to waste on us.”
“It is very strange to think that this is really the last of it. Are you
prepared to die?”
“Prepared? What is prepared?” he answered. “One is never ready
to stop living. And there were a great many things I wanted to do
yet.”
“Were any of them important?”
An ironic smile twisted the corner of his lips. “Now that you
mention it—no. I wanted to make a good deal more money. I was
going to turn over two or three pieces of real estate next week that I
expected a profit upon. I meant to build a finer house for my wife—a
big, new one, with all the modern wrinkles of architecture and
furnishing. Then, if I had known she was going to have charge of
things so soon, I should have altered one or two investments”——
His pain grew sharper and he groaned. When he was still she
spoke again.
“If I had met you yesterday I should have said that your interests in
life were very much less fine and spiritual than my own. I wrote
things that people praised. They said I was clever, ingenious, witty;
but they never said I was an artist. I meant to make them say it. I
was going to write a novel next winter that should show”—She
stopped, but presently went on, musingly: “It is very odd, but
somehow it doesn’t seem as important as it did this morning. Do you
care that your house will never be built?”
“No.”
“And I don’t care about my novel. I called my interest in life art,
and you called yours business; but neither of them seems to count
any more. The question is, What does count?”
“Close your eyes and lie still for five minutes, and note what you
find yourself unable to avoid thinking of. That will show you what
counts.”
“You have been trying it?”
 He made a motion of assent.
“Well,” he asked, after a silence on her part that seemed long,
“does it work?”
“Yes,” she said, in a tense way; “it works too well. What did you
see?”
Again the ironic smile twisted the visible corner of his mouth.
“Shall we exchange confidences—last confessions, and all that? I’d
just as soon. Reticence isn’t worth much now. Only—you begin.”
“I saw,” she said, slowly, “my husband’s eyes. I had forgotten how
they looked when he found that I really meant to insist on a
separation. He could not bear it, for he adored the ground I walked
on. It was five years ago. I had no presentable reason for leaving
him. He was so horribly good-natured that it used to irritate me. And I
didn’t care for the domestic life. It interfered with my work, although
he had promised that it should not. I wanted to be free again. He let
me have the child. He was very good about the whole business—
painfully good, in fact. But it did hurt him cruelly. I have been very
much happier since, but I don’t suppose he has.”
“Did he have brown eyes—the big, faithful, dog-like kind?” asked
the man.
“How did you know?”
“That good sort often do. The girl I jilted did. We had been
engaged almost from our cradles. There was an accident with
horses, and she got hurt. She limped a little afterward, and there
were scars on her face and neck—not very bad scars, but still they
were there. She had been a little beauty before that; but she never at
any time thought much about her looks, and it hadn’t occurred to her
that I minded. But I did mind. I fretted over it until I fancied that I
didn’t love her, after all; but I did. One day I told her so. You know
how she looked at me. She asked if the accident made any
difference, and I hadn’t the skill to lie about it so that she believed
me. She rose at once, as if to put an end to our interview. All she
said was, ‘I thought you knew better what love was.’ I can hear how
her voice sounded. She was badly cut up; lost her health and all that.
And I never could pretend I wasn’t to blame. The girl I married later
was faultlessly pretty, but there was nothing in the world to her.”
“We seem to be a nice sort, don’t we?” said the woman,
reflectively.
“We are no worse than others. Unselfishness is out of fashion.
Everybody takes what he wants nowadays.”
“My husband didn’t.”
“I respect your husband. But you did it. We did the same sort of
thing, you and I; only I think you are the worse of the two. It is natural
for a man to want a wife who isn’t disfigured.”
“It is natural for a clever woman to want to live unfettered.”
“Perhaps. But I erred through the worser part of my nature, and
you through the better. My revolt against unselfishness was physical,
and yours intellectual. Therefore you fell farther than I, by as much
as the mind is better than the body; don’t you see?”
“That is speciously put, but I doubt its truth.”
Both were silent for a space.
“I have it!” she breathed suddenly, and her voice was stronger; for
even in the clutches of death a new insight into the meaning of
things had power to stimulate her whole being. “It is this way. Our
error was the same. We both betrayed their trust in us. We grieved
love. And the reason that we remember now is that love and God are
one, and this is the judgment. That is why we see their eyes
rebuking us. It comes to us, now that we die. That is all life is for—to
learn not to grieve love. Why did I never know it before? Oh, if I had
put that in my books!”
“If you had put it in your life it would have been better,” interrupted
the man; but she went on, unheeding:
“That must be what they meant when they said my work lacked
conviction. It is the heart that takes sides. One man said I was too
clever to be interesting. I never understood what he meant before,
but I see now. It was that I had mind enough but too little heart. I
wanted to become as one of the gods by knowing, and the appointed
path is by loving. To be human and to love is to be divine.”
“Oh, wise conclusion!” mocked the man. “What does it profit you to
know it—now?”
She was silent, spent with the effort of her eager speech. The
maps on the opposite wall whirled before her eyes. She felt herself
slipping—slipping. Yet, though she found no words to tell him why,
there came to her a sudden, sweet assurance that it profited her
much, even at this last hour, to know the thing she had just spoken.
It was a long time before she found strength to ask: “Shall you be
here after I am gone?”
“Why?”
“I gave them my husband’s name. I knew he would be glad to
come. He lives a hundred miles from here, and it will only take him
four hours at the longest. I shall not last that long. If you would tell
him”—
“Tell him what?”
“Tell him,” said the woman, slowly, “that I saw; that I am sorry I
grieved love and him; that I wish I had been wiser about what life
meant; that love is always best.”
“The fact is,” said the man, reluctantly, “I did not mean to stay. I
dabbled in medicine a little once, and I know that I can last this way
a day or two. But I am in pain now, and it will grow worse. What is
the use of staying? They tied an artery for me; it might easily get
untied, you know.”
“Aren’t you going to wait until your wife comes?” she asked,
wonderingly.
“Better not,” answered the man, briefly. “It would hurt her less this
way, and me too. Scenes worry me, and her nerves are delicate.”
“What farces such marriages as yours are!”
“Better a farce than a tragedy. My wife has been happier than your
husband. She has been very comfortable, and she will continue to
be so, for my estate is reasonably large.”
“Then Arthur will never know that I am sorry, and I want him to.
Oh, God! I want him to.”
The man lay, frowning sharply at the ceiling. The ineffectual
anguish of her cry had touched him, but his pain was growing worse.
At last he spoke.
“Look here. If I will stay and deliver that message for you, will you
do something for me?”
“I? What can I do for any one?”
“You are a woman, though not, it seems, a very loving one. You
can tell me if there is any forgiveness for the hurt I gave that girl, and
if there is, absolve me in love’s name! I cannot bear her eyes.”
“Love forgives everything,” she answered, simply. “Wait until you
see Arthur’s face when you tell him I was sorry. That will show you.”
“Say it!” murmured the man, peremptorily. “Let me hear the words,
as she might say them.”
She turned upon her side to smile at him. Her voice had grown so
faint that it seemed but a disembodied, yearning tenderness that
spoke.
“In love’s name, then, and hers, absolvo te”—And the thread of
sound dropped into a silence that was to remain unbroken.
The man lay still, clenching his hands and unclenching them. The
thrusts of pain had grown very sharp, but he grimly set his teeth. He
might ask for morphine; but if he took it “Arthur” might come and go
while he lay in stupor, and the message remain forever undelivered.
He looked at the clock on the opposite wall. Perhaps he had still
three hours to wait. What should he do? That last dart was keenest
of them all. What did people do in torture, people who had made
promises that they must stay to keep? Surely there was something.
Ah, that was it. Of course. They prayed. Then why not he, as well?
His lips moved feverishly.
 “Christ, thou who suffered for love’s sake, give me—give me the
pluck to hold out three hours more.”