Macroeconomics : Principles, Problems, and Policies

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  • Edition: 16th
  • Format: Paperback
  • Copyright: 2004-01-01
  • Publisher: MCG/IRWIN
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Throughout DiscoverEcon you will notice expanded exercises, interactive graphs, and tutorials. You will also notice 25 new videos hosted by Paul Solman, Economics Correspondent for The Lehrer NewsHour on PBS. Solman developed these videos on DVD specifically for Principles of Economics to further illustrate and reinforce basic economic concepts from the text. These videos are linked to DiscoverEcon topics to let you view the videos as you work through each DiscoverEcon chapter. Book jacket.

Table of Contents

List of Key Graphsp. vi
Prefacep. vii
Contributorsp. xiii
An Introduction to Economics and the Economy
To the Studentp. 2
The Nature and Method of Economicsp. 3
The Economic Perspectivep. 3
Consider This: Free for All?p. 4
Why Study Economics?p. 5
Economic Methodologyp. 6
Macroeconomics and Microeconomicsp. 9
Pitfalls to Sound Reasoningp. 10
A Look Aheadp. 12
Last Word: Fast-Food Lines: An Economic Perspectivep. 12
Graphs and Their Meaningp. 15
The Economizing Problemp. 22
The Foundation of Economicsp. 22
Economics: Employment and Efficiencyp. 24
Unemployment, Growth, and the Futurep. 28
Consider This: A Matter of Degrees: Is College Worth the Cost?p. 32
Economic Systemsp. 33
The Circular Flow Modelp. 34
Last Word: September 11, 2001, and the War on Terrorismp. 35
Individual Markets: Demand and Supplyp. 39
Marketsp. 39
Demandp. 40
Supplyp. 45
Supply and Demand: Market Equilibriump. 48
Consider This: The Cutting Edgep. 50
Application: Government-Set Pricesp. 52
Last Word: Ticket Scalping: A Bum Rap?p. 55
Applications and Extensions of Supply and Demand Analysisp. 59
Changes in Supply and Demandp. 1
Preset Pricesp. 4
Consider This: Taking Back a "Gift"p. 5
Nonpriced Goods: The American Bisonp. 6
Consumer and Producer Surplusp. 7
Last Word: Efficiency Gains from Generic Drugsp. 11
The Market Systemp. 60
Characteristics of the Market Systemp. 60
The Market System at Workp. 64
Consider This: McHits and McMissesp. 66
Competition and the "Invisible Hand"p. 69
Last Word: Shuffling the Deckp. 70
The U.S. Economy: Private and Public Sectorsp. 73
Households as Income Receiversp. 73
Households as Spendersp. 74
The Business Populationp. 75
Legal Forms of Businessesp. 76
The Public Sector: Government's Rolep. 79
Consider This: Street Entertainersp. 82
The Circular Flow Revisitedp. 83
Government Financep. 84
Federal Financep. 85
State and Local Financep. 87
Last Word: The Financing of Corporationsp. 88
The United States in the Global Economyp. 91
International Linkagesp. 91
The United States and World Tradep. 92
Specialization and Comparative Advantagep. 96
The Foreign Exchange Marketp. 99
Consider This: A Ticket to Ridep. 100
Government and Tradep. 101
Multilateral Trade Agreements and Free-Trade Zonesp. 103
Global Competitionp. 106
Last Word: Petition of the Candlemakers, 1845p. 106
Macroeconomic Measurement and Basic Concepts
Measuring Domestic Output and National Incomep. 112
Assessing the Economy's Performancep. 112
Gross Domestic Productp. 112
The Expenditures Approachp. 115
Consider This: Stock Answers about Flowsp. 117
The Income Approachp. 118
Other National Accountsp. 120
Nominal GDP versus Real GDPp. 123
Shortcomings of GDPp. 125
Last Word: Feeding the GDP Accountsp. 127
Introduction to Economic Growth and Instabilityp. 131
Economic Growthp. 131
The Business Cyclep. 133
Unemploymentp. 135
Inflationp. 141
Consider This: Clipping Coinsp. 143
Redistribution Effects of Inflationp. 144
Effects of Inflation on Outputp. 147
Last Word: The Stock Market and the Economyp. 149
Basic Macroeconomic Relationshipsp. 152
The Income-Consumption and Income-Saving Relationshipsp. 152
Consider This: What Wealth Effect?p. 159
The Interest-Rate-Investment Relationshipp. 159
The Multiplier Effectp. 164
Last Word: Squaring the Economic Circlep. 167
Macroeconomic Models and Fiscal Policy
The Aggregate Expenditures Modelp. 172
Simplificationsp. 172
Consumption and Investment Schedulesp. 172
Equilibrium GDP: C + I[subscript g] = GDPp. 173
Other Features of Equilibrium GDPp. 176
Changes in Equilibrium GDP and the Multiplierp. 177
Adding International Tradep. 179
Adding the Public Sectorp. 182
Equilibrium versus Full-Employment GDPp. 185
Limitations of the Modelp. 187
Last Word: Say's Law, the Great Depression, and Keynesp. 188
Aggregate Demand and Aggregate Supplyp. 193
Aggregate Demandp. 193
Aggregate Supplyp. 197
Equilibrium and Changes in Equilibriump. 201
Consider This: Ratchet Effectp. 205
Last Word: Why Is Unemployment in Europe So High?p. 207
The Relationship of the Aggregate Demand Curve to the Aggregate Expenditures Modelp. 211
Fiscal Policyp. 214
Legislative Mandatesp. 214
Fiscal Policy and the AD-AS Modelp. 215
Built-In Stabilityp. 218
Evaluating Fiscal Policyp. 220
Problems, Criticisms, and Complicationsp. 223
Last Word: The Leading Indicatorsp. 227
Current Thinking on Fiscal Policyp. 228
Money, Banking, and Monetary Policy
Money and Bankingp. 232
The Functions of Moneyp. 232
The Supply of Moneyp. 233
Consider This: Are Credit Cards Money?p. 236
What "Backs" the Money Supply?p. 236
The Demand for Moneyp. 238
The Money Marketp. 240
The Federal Reserve and the Banking Systemp. 242
Recent Developments in Money and Bankingp. 245
Last Word: The Global Greenbackp. 248
How Banks and Thrifts Create Moneyp. 252
The Balance Sheet of a Commercial Bankp. 252
Prologue: The Goldsmithsp. 252
A Single Commercial Bankp. 253
The Banking System: Multiple-Deposit Expansionp. 260
Last Word: The Bank Panics of 1930 to 1933p. 265
Monetary Policyp. 268
Consolidated Balance Sheet of the Federal Reserve Banksp. 268
Tools of Monetary Policyp. 270
Monetary Policy, Real GDP, and the Price Levelp. 276
Monetary Policy in Actionp. 279
Consider This: Pushing on a Stringp. 282
The "Big Picture"p. 286
Last Word: For the Fed, Life Is a Metaphorp. 287
Long-Run Perspectives and Macroeconomic Debates
Extending the Analysis of Aggregate Supplyp. 292
From Short Run to Long Runp. 292
Applying the Extended AD-AS Modelp. 295
The Inflation-Unemployment Relationshipp. 297
The Long-Run Phillips Curvep. 300
Taxation and Aggregate Supplyp. 302
Consider This: Sherwood Forestp. 304
Last Word: Has the Impact of Oil Prices Diminished?p. 305
Economic Growthp. 308
Ingredients of Growthp. 308
Production Possibilities Analysisp. 309
U.S. Economic Growth Ratesp. 312
Accounting for Growthp. 312
Consider This: Economic Growth Rates Matter!p. 313
The Productivity Acceleration: A New Economy?p. 316
Is Growth Desirable and Sustainable?p. 320
Last Word: Women and Economic Growthp. 322
Deficits, Surpluses, and the Public Debtp. 325
Deficits, Surpluses, and Debt: Definitionsp. 325
Budget Philosophiesp. 325
The Public Debt: Facts and Figuresp. 326
False Concernsp. 329
Substantive Issuesp. 330
Deficits and Surpluses: 1992-2012p. 332
Last Word: The Long-Run Fiscal Imbalance: Social Securityp. 334
Disputes over Macro Theory and Policyp. 338
Some History: Classical Economics and Keynesp. 338
What Causes Macro Instability?p. 340
Does the Economy "Self-Correct"?p. 344
Rules or Discretion?p. 347
Consider This: On the Road Againp. 348
Summary of Alternative Viewsp. 350
Last Word: The Taylor Rule: Could a Robot Replace Alan Greenspan?p. 351
International Economics and the World Economy
International Tradep. 356
Some Key Factsp. 356
The Economic Basis for Tradep. 357
Comparative Advantage: Graphical Analysisp. 358
Supply and Demand Analysis of Exports and Importsp. 363
Trade Barriersp. 366
The Case for Protection: A Critical Reviewp. 369
Consider This: Shooting Yourself in the Footp. 370
Last Word: The WTO Protestsp. 372
The World Trade Organizationp. 373
Exchange Rates, the Balance of Payments, and Trade Deficitsp. 377
Financing International Tradep. 377
The Balance of Paymentsp. 378
Flexible Exchange Ratesp. 381
Consider This: The Big Mac Indexp. 383
Fixed Exchange Ratesp. 386
International Exchange-Rate Systemsp. 388
Recent U.S. Trade Deficitsp. 392
Last Word: Speculation in Currency Marketsp. 394
The Economics of Developing Countriesp. 397
The Rich and the Poorp. 1
Obstacles to Economic Developmentp. 3
The Vicious Circlep. 10
Role of Governmentp. 11
Role of Advanced Nationsp. 12
Where from Here?p. 15
Last Word: Famine in Africap. 16
Transition Economies: Russia and Chinap. 398
Ideology and Institutionsp. 1
State Ownership and Central Planningp. 2
Problems with Central Planningp. 3
Collapse of the Soviet Economyp. 5
The Russian Transition to a Market Systemp. 6
Market Reforms in Chinap. 10
Outcomes and Prospectsp. 11
Conclusionp. 13
Last Word: Police Smash Down Smirnov's Doorsp. 14
Glossaryp. 1
Indexp. 1
Table of Contents provided by Rittenhouse. All Rights Reserved.

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