Microeconomics: Private Markets and Public Choice plus MyEconLab plus eBook 1-semester Student Access Kit

by Ekelund, Robert B.; Ressler, Rand W.; Tollison, Robert D.

• ISBN13: 9780201680270
• ISBN10: 0201680270
• Edition: 6th
• Format: Package
• Copyright: 2006-01-01
• Publisher: Addison Wesley

Summary

Acclaimed for its lucid presentation of basic microeconomic principles and rich array of real-world applications, the sixth edition of this classic text brings microeconomics to life for students with its compelling public choice approach. The authors' focus stretches beyond the theories of how ideal markets work to the actual arena of political decision-making, interest group influence, and government policies.

Table of Contents

Preface	xxv
PART 1 THE POWER OF ECONOMIC THINKING	1	(112)
Economics in Perspective	3	(24)
What Economics is	3	(2)
Economics: A Working Definition	4	(1)
The Economic Condition: Scarcity	4	(1)
Focus: Scarcity, Economizing, and the College Student's Time	5	(3)
Scarce Resources and Economic Problems	6	(1)
Other Factors Affecting Resources and Growth	7	(1)
Key Principles of Economic Thinking	8	(5)
Resources and Activities Cost More than You Think	8	(1)
Economic Behavior is Rational	9	(1)
Choices Are Made at the Margin	10	(1)
Prices Are Signals to Producers and Consumers	10	(1)
Public Choices Are Different from Private Choices	11	(1)
Economists Do Not Decide Who Gets What	11	(1)
Money Is Helpful, but Not Too Much	12	(1)
Voters Choose the Role of Government---The Economist Analyzes	12	(1)
The Role of Theory In Economics	13	(1)
The Role of Economics and Economists	13	(2)
Positive and Normative Economics	14	(1)
Microeconomics and Macroeconomics	14	(1)
Let's Get to Work	15	(1)
Application: How Economics Prepares You for Life and Work	15	(1)
Summary	16	(1)
Key Terms	17	(1)
Questions For Review and Discussion	17	(1)
Working with the Web	17	(2)
Appendix: Working With Graphs	19	(8)
The Purpose of Graphs	19	(1)
How to Draw a Graph	20	(2)
Slope of the Curve	22	(2)
Summary	24	(1)
Key Terms	24	(1)
Questions for Review and Discussion	25	(2)
Opportunity Cost, Specialization, and Trade	27	(24)
Specialization and Trade: A Feature Of All Societies	27	(1)
Focus: Economic Specialization in Everyday Life: Marriage and Roommate Selection	28	(1)
Opportunity Cost and Production Possibilities: Individuals and Society Must Choose	29	(2)
The Law of Increasing Costs	30	(1)
Why the Production Possibilities Frontier Shifts	31	(2)
The Shifting Frontier	31	(1)
Economic Growth: How Economices Progress	31	(2)
Comparative Advantage	33	(9)
Specialization	36	(1)
Trade: The Fruits of Specialization	37	(1)
Factors Explaining Comparative Advantage	38	(1)
Exchange Costs	39	(3)
Focus: Free Trade Associations, Past and Present	42	(3)
Application: AIDS and Reduced Production Possibilities in Africa	45	(3)
Summary	48	(1)
Key Terms	48	(1)
Questions for Review and Discussion	48	(1)
Problems	49	(1)
Working With the Web	50	(1)
Private Markets and Prices: Laws of Demand and Supply	51	(32)
An Overview of the Price System	51	(3)
The Circular Flow of Products and Resources	52	(1)
Full Versus Money Prices	52	(2)
Focus: Full Price and a New Orleans Restaurant	54	(1)
The Law of Demand	54	(7)
The Individual's Demand Schedule and Demand Curve	55	(1)
Factors Affecting the Individual's Demand Curve	56	(4)
Reviewing the Law of Demand	60	(1)
From Individual to Market Demand	60	(1)
The Law of Supply and Firm Supply	61	(4)
Changes in Quantity Supplied and Shifts in the Supply Curve	63	(2)
Market Supply	65	(1)
Market Equilibrium Price and Output	65	(7)
The Mechanics of Price Determination	66	(1)
Price Rationing	67	(1)
Effects on Price and Quantity of Shifts in Supply or Demand	68	(4)
Simple Supply and Demand Analysis: Other Considerations	72	(3)
Price Controls and Public Choice	72	(3)
Focus: Price Floors Cost You More than Peanuts	75	(1)
Application: Opportunity Cost, ``Scalping,'' and Full Price: Waiting for Van Gogh	76	(2)
Summary	78	(1)
Key Terms	79	(1)
Questions for Review and Discussion	79	(1)
Problems	80	(1)
Working with the Web	81	(2)
Demand and Supply: Property, Markets, and Public Choice	83	(30)
Institutions are ``Rules of The Game'' That Facilitate Markets	84	(2)
Property Rights and Contracts	84	(1)
Property Rights and Economic Incentives	85	(1)
Focus: Shipping Live Prisoners to Australia	86	(2)
Private Competitive Markets	87	(1)
Why are Private Competitive Markets Efficient?	88	(6)
Demanders Value Goods	88	(2)
Supply, Costs, and Value	90	(2)
Competitive Equilibrium and Economic Efficiency	92	(2)
The Role of Government	94	(4)
The Environment, Externalities, and Market Failure	94	(2)
Public Goods and Market Failure	96	(1)
Antitrust and Monopoly Regulation	97	(1)
Public Choice---The Relation Between Politics and Economic Efficiency	98	(1)
Political Versus Economic Markets	98	(1)
Why Are Voters ``Myopic?''	99	(1)
Focus: Politicians are Demanded and Supplied	99	(2)
Interest Groups Tend to Dominate	101	(1)
Interest Groups and Wealth Transfers: The Case of Barbers and Cosmetologists	101	(4)
Application: Why Are There So Many Restaurants and Golf Courses in State Capital Cities?	105	(1)
Summary	106	(1)
Key Terms	107	(1)
Questions for Review and Discussion	107	(1)
Working with the Web	108	(1)
Point/Counterpoint	109	(4)
PART 2 THE ARCHITECTURE OF PRIVATE MARKETS	113	(182)
Elasticity	115	(22)
The Concept of Elasticity	116	(1)
Price Elasticity of Demand	116	(8)
Formulation of Price Elasticity of Demand	116	(1)
Elastic, Inelastic, and Unit Elastic Demand	117	(1)
Elasticity Along the Demand Curve	118	(3)
Relation of Demand Elasticity to Expenditures and Receipts	121	(3)
Determinants of Price Elasticity of Demand	124	(1)
Focus: How to Tell Who Your Friends are	125	(2)
Number and Availability of Substitutes	126	(1)
The Importance of Being Unimportant	126	(1)
Time and Elasticity of Demand	126	(1)
Other Applications of Elasticity of Demand	127	(2)
Income Elasticity of Demand	128	(1)
Focus: Elasticity and Your World	129	(1)
Cross Elasticity of Demand	129	(1)
Elasticity of Supply	130	(2)
Time and Elasticity of Supply: Maryland Crab Fishing	131	(1)
Application: Cigarettes, Elasticity, and Public Choice: The Effects of an Excise Tax	132	(2)
Summary	134	(1)
Key Terms	134	(1)
Questions for Review and Discussion	134	(1)
Problems	135	(1)
Working with the Web	136	(1)
The Logic of Consumer Choice and Demand	137	(30)
Utility and Marginal Utility	137	(2)
Consumer Equilibrium: Diminishing Marginal Utility a Work	139	(3)
Basic Assumptions	140	(1)
Balancing Choices Among Goods	141	(1)
Focus: Menus and Marginal Utility: ``Save Room for Dessert!''	142	(6)
The Budget Constraint and Consumer Equilibrium	143	(3)
Consumers Maximize Satisfaction Among Thousands of Goods	146	(1)
Consumer Rationality and a Famous Riddle: Marginal Utility and Smith's Diamond-Water Paradox	146	(2)
From Diminishing Marginal Utility to the Law of Demand	148	(1)
The Substitution Effect and Income Effect	148	(1)
Focus: ``All You Can Eat'' Pizza	149	(2)
Marginal Utility and the Law of Demand	150	(1)
Some Pitfalls to Avoid	151	(1)
Application: Is It Rational to Vote?	152	(1)
Summary	153	(1)
Key Terms	154	(1)
Questions for Review and Discussion	154	(1)
Problems	155	(1)
Working with the Web	155	(2)
Appendix: Indifference Curve Analysis	157	(10)
Indifference Curves	157	(1)
Characteristics of Indifference Curves	158	(2)
The Budget Constraint	160	(1)
Consumer Equilibrium with Indifference Curves	161	(1)
Indifference Curves and the Law of Demand	162	(1)
Substitution and Income Effects	163	(2)
Summary	165	(1)
Key Terms	165	(1)
Questions For Review and Discussion	165	(1)
Problem	166	(1)
The Firm and Costs of Production	167	(26)
The Nature of the Firm	167	(1)
How Markets and Firms Coordinate Resources	168	(1)
Costs in a Business Firm	169	(1)
Focus: Going into Business for Yourself	170	(3)
Explicit and Implicit Costs	170	(1)
The Nature of Economic Costs	171	(1)
Economic Profits Versus Accounting Profits	172	(1)
Private Costs and Social Costs	172	(1)
Economic Time	173	(1)
Short-Run Costs: An Introduction	173	(5)
Fixed Costs and Variable Costs	173	(3)
Diminishing Returns	176	(2)
Going into Business with Others---The Partnership	178	(5)
Diminishing Marginal Returns and Short-Run Costs	180	(3)
Long-Run Costs	183	(2)
Adjusting Plant Size	183	(1)
Economies and Diseconomies of Scale	184	(1)
Focus: Big Business: The Corporation	185	(1)
Other Shapes of the Long-Run Average Total Cost Curve	185	(1)
Shifts in Cost Curves	186	(1)
Costs and Supply Decisions	187	(1)
Application: The Draft, Jury Duty, and Conscripted ``Public Service'': Opportunity Cost and You	187	(2)
Summary	189	(1)
Key Terms	189	(1)
Questions for Review and Discussion	190	(1)
Problems	190	(1)
Working with the Web	191	(2)
Competitive Markets	193	(36)
The Process of Competition	194	(1)
Pure Competition	194	(1)
Focus: The Economics of Information: Searching for the Best Deal	194	(3)
The Purely Competitive Firm and Industry in the Short Run	197	(10)
The Purely Competitive Firm as a Price Taker	197	(1)
The Demand Curve of the Competitive Firm	197	(1)
Short-Run Profit Maximization by the Purely Competitive Firm	197	(3)
A Numerical Illustration of Profit Maximization	200	(3)
Economic Losses and Shutdowns	203	(2)
Supply Curve of a Purely Competitive Firm	205	(1)
From Firm to Industry Supply	206	(1)
The Purely Competitive Firm and Industry in the Long Run	207	(6)
Equilibrium in the Long Run	207	(1)
The Adjustment Process: Establishing Equilibrium	208	(2)
The Long-Run Industry Supply Curve	210	(3)
Pure Competition and Economic Efficiency	213	(2)
The Competitive Market and Resource Allocation	213	(2)
Focus: Don't Buy a ``Lemon'': Information Problems and You	215	(2)
Competition in the Real World	216	(1)
Application: Do You Have a ``Hunting License?'': The Full Price of Parking on Campus	217	(2)
Summary	219	(1)
Key Terms	220	(1)
Questions for Review and Discussion	220	(1)
Problems	220	(1)
Working with the Web	221	(1)
Appendix: The Economics of Agriculture in the United States: Toward a Market Approach	222	(7)
Government Attempts to Solve Basic Agricultural Problems	222	(3)
The Move to Markets in Agriculture	225	(4)
Monopoly: The Firm as Industry	229	(26)
What is a Monopoly?	230	(1)
Focus: Mercantilism and the Sale of Monopoly Rights	230	(2)
Legal Barriers to Entry	231	(1)
Economies of Scale and Natural Monopoly	232	(1)
Monopoly Price and Output in the Short Run	232	(8)
The Monopolist's Demand Curve	232	(2)
The Monopolist's Revenues	234	(2)
Total Revenue, Marginal Revenue, and Elasticity of Demand	236	(1)
Short-Run Price and Output of the Monopolist	237	(1)
Monopoly Profits	238	(2)
Comparing the Monopoly Firm and the Purely Competitive Firm	240	(1)
Pure Monopoly in the Long Run	240	(1)
Entry and Exit	240	(1)
Adjustments to Scale	240	(1)
Price Discrimination	240	(3)
When Can Price Discrimination Exist?	241	(1)
A Model of Price Discrimination	241	(2)
Focus: ``Are You a Victim of Price Discrimination on Campus?''	243	(1)
The Case Against Monopoly	244	(2)
The Welfare Loss Resulting from Monopoly Power	244	(2)
Production Costs of a Monopoly	246	(1)
Monopoly and the Distribution of Income	246	(1)
The Case for Monopoly	246	(2)
Focus: Patents: The Inventor's Monopoly	248	(1)
Application: Technology, Economics, and the Postal Monopoly	249	(2)
Summary	251	(1)
Key Words	252	(1)
Questions for Review and Discussion	252	(1)
Problems	253	(1)
Working with the Web	253	(2)
Monopolistic Competition and Advertising	255	(16)
Monopolistic Competition	256	(4)
Characteristics of Monoplistic Competition	256	(1)
Advertising and Monopolisitic Competition	257	(3)
Focus; Let Your Fingers Do the Walking: Information in Markets	260	(1)
Focus: Advertising, Interest Groups, and the Price of Eyeglasses	261	(5)
Short-Run and Long-Run Equilibrium Under Monopolistic Competition	262	(1)
Does Monopolistic Competition Waste Resources?	263	(3)
How Useful Is the Theory of Monopolistic Competition?	266	(1)
Application: What's in a Brand Name? The Consumer Chooses	266	(2)
Summary	268	(1)
Key Terms	268	(1)
Questions for Review and Discussion	268	(1)
Working with the Web	269	(2)
Few Competitors: Game Theory, Oligopoly, and Cartels	271	(24)
Game Theory and Mutual Interdependence	272	(4)
Mutual Interdependence in the Economic World	272	(1)
Game Theory: A Basis for Small-Numbers Behavior	272	(4)
Oligopoly	276	(4)
Barriers to Entry	276	(1)
Models of Oligopoly Pricing	277	(3)
Cartel Models	280	(1)
Characteristics of Cartels	281	(1)
Focus: Bid Rigging: Cartels in Action	281	(4)
Cartel Formation	282	(1)
The Cartel in Action	282	(1)
Cartel Enforcement	283	(2)
Why Cartels May or May Not Succeed	285	(1)
From Competition to Monopoly: The Spectrum Revisited	285	(2)
Application: Diamonds, the De Beers Cartel, and the Russian Threat	287	(2)
Summary	289	(1)
Key Terms	290	(1)
Questions for Review and Discussion	290	(1)
Problems	291	(1)
Working with the Web	291	(1)
Point/Counterpoint	292	(3)
PART 3 INPUT MARKETS	295	(102)
Competitive Labor Markets	297	(24)
Factor Markets: An Overview	298	(2)
Derived Demand	298	(1)
Firms as Resource Price Takers	298	(2)
Marginal Productivity Theory	300	(3)
The Profit-Maximizing Level of Employment	300	(2)
Profit-Maximizing Rules for All Inputs	302	(1)
The Demand for Labor	303	(6)
The Short-Run Market Demand for Labor	304	(1)
The Firm's Long-Run Demand for Labor	305	(1)
Changes in the Demand for Labor	305	(2)
Monopoly and the Demand for Labor	307	(2)
Focus: The Marginal Revenue Product of Professional Baseball Players	309	(1)
The Supply of Labor	309	(6)
Individual Labor Supply	309	(3)
Human Capital	312	(2)
Other Equalizing Differences in Wages	314	(1)
Focus: Politics and ``Justice'' in the Workplace: Comparable Worth	315	(1)
Marginal Productivity Theory and Income Distribution	316	(1)
Application: When Do You Live? Regional Wage Differences	316	(2)
Summary	318	(1)
Key Terms	319	(1)
Questions for Review and Discussion	319	(1)
Problems	320	(1)
Working with the Web	320	(1)
Labor Unions	321	(22)
Types of Labor Unions	322	(1)
Craft Unions	322	(1)
Industrial Unions	322	(1)
Focus: The American Medical Association as a Union	323	(2)
Public Employees' Unions	323	(1)
The Decline of Union Membership in the United States	324	(1)
Union Activities	325	(3)
Union Goals	325	(2)
Union Objectives and the Elasticity of Demand	327	(1)
Focus: ``Services Pay'' and the Restructuring of the American Economy	328	(2)
Increasing the Demand for Union Labor	328	(2)
Monopsony: A Single Employer of Labor	330	(6)
Bilateral Monopoly and the Need for Bargaining	331	(1)
Collective Bargaining	332	(1)
Strikes	332	(2)
Public Choice and Union Bargaining	334	(1)
The Union as a Political Interest Group	335	(1)
The Impact of Unions on Labor's Share of Total Income	336	(2)
Conclusion	338	(1)
Application: Should College Football Players Be Paid? The NCAA Monopsony	338	(2)
Summary	340	(1)
Key Terms	340	(1)
Questions for Review and Discussion	340	(1)
Problems	341	(1)
Working with the Web	341	(2)
Capital, Land, and Entrepreneurship	343	(24)
The Role of Capital	343	(5)
Roundabout Production and Capital Formation	344	(1)
The Rate of Interest	345	(1)
Demand and Supply of Loanable Funds	346	(2)
Focus: Should You Be Protected from High Interest Rates? Usury and Interest Groups	348	(6)
Interest as the Return to Capital	349	(1)
The Nature of Returns to Owners of Capital	350	(1)
The Present Value of Future Income	351	(1)
The Benefits of Capital Formation	352	(2)
The Concept of Economic Rent	354	(1)
Land Rents	354	(2)
The Supply of Land to Alternative Uses	355	(1)
Profits and the Allocation of Resources	356	(2)
Profit Data	356	(1)
Rate of Return on Capital	357	(1)
Accounting Versus Economic Profits	358	(1)
Entrepreneurship	358	(2)
Entrepreneurs and Information: The Austrian View	359	(1)
Application: Trading Property Rights: Stocks and Bonds	360	(2)
Summary	362	(1)
Key Terms	363	(1)
Questions for Review and Discussion	363	(1)
Problems	364	(1)
Working with the Web	364	(3)
Income Distribution, Poverty, and Health Care	367	(30)
The Individual and Income Distribution	368	(2)
Labor Income	368	(1)
Income from Savings and Other Assets	369	(1)
Taxes and Transfer Payments	369	(1)
How is Income Inequality Measured?	370	(3)
Interpretation of Money Distribution Data	370	(1)
The Lorenz Curve	371	(2)
Income Distribution in the United States	373	(5)
Adjustments to Money Income	374	(3)
Factors Affecting Income Distribution	377	(1)
Age Distribution and Income	377	(1)
Rags to Riches Mobility	377	(1)
Focus: Divorce, Single-Parent Families, and Income Distribution	378	(1)
Characteristics of Income Distribution: Poverty and Discrimination	378	(5)
Poverty	379	(1)
Race and Sex Discrimination in Wages	380	(1)
Alleviating Poverty: The 1996 Revolution in Welfare	381	(2)
Health Care: An Ongoing Problem	383	(1)
The U.S. Health Care System	383	(1)
Focus: Should You Buy Health Insurance?	384	(2)
Health Care Reform: Some Models	385	(1)
Focus: Who Pays the Bill for Patients' Rights?	386	(2)
The Justice of Income Distribution	388	(1)
Application: Does Social Security Protect the Poor?	388	(3)
Summary	391	(1)
Key Terms	391	(1)
Questions for Review and Discussion	392	(1)
Problem	392	(1)
Working with the Web	393	(1)
Point/Counterpoint	394	(3)
PART 4 APPLIED MICROECONOMICS AND PUBLIC CHOICE	397	(372)
Antitrust, Regulation, and Public Policy	399	(30)
Measuring Industrial Concentration	400	(2)
Industry Concentration Ratios	400	(2)
Public Policy: Antitrust	402	(6)
Antitrust Law	402	(1)
Antitrust Agencies	403	(1)
Enforcement of Antitrust Policies	404	(3)
Multinational Firms	407	(1)
An Economic View of Antitrust Cases	408	(1)
Public Policy: Regulation	408	(1)
Focus: The Microsoft Case: Is It Monopoly, or Is It Envy?	409	(8)
Regulatory Agencies	409	(3)
The Purpose of Regulation	412	(3)
Health and Safety Regulation	415	(1)
Government Ownership	416	(1)
Laissez-Faire	417	(1)
The Movement to Deregulation	417	(1)
Focus: Franchising Funerals in Nineteenth-Century London and Paris	418	(3)
Focus: Airline Deregulation: Success Story or Consumer Nightmare?	421	(1)
Conclusion	422	(1)
Application: The Telecommunications Act of 1996: Good Intertions Meet Market Realities	422	(3)
Local Phone Service	422	(1)
Payphones	423	(1)
Credit Card Calls	423	(1)
Cable Rates	423	(1)
Radio and TV Markets	424	(1)
Summary	425	(1)
Key Terms	426	(1)
Questions for Review and Discussion	426	(1)
Problems	426	(1)
Working with the Web	427	(2)
Natural Resources, the Environment, and Public Goods	429	(28)
Natural Resources	430	(3)
The Market for Nonrenewable Resources	431	(1)
The Market for Renewable Resources	432	(1)
Focus: The Economics of Doomsday	433	(1)
The Economics of Common Property	434	(4)
Fishing in International Waters	434	(1)
Drilling for Oil	435	(2)
International Pollution Problems: Acid Rain and Global Warning	437	(1)
Focus: The Kyoto Treaty: Who Benefits from Global Warning?	438	(1)
Externality Theory	439	(8)
Negative and Positive Externalities	439	(1)
Determining the Need for Government Intervention	440	(1)
Correcting Relevant Externalities	441	(6)
Public Goods Theory	447	(5)
Public Provision of Public Goods	448	(1)
Free Riders	449	(1)
Pricing Public Goods	449	(3)
A Role for Government	452	(1)
Application: Can Economic Incentives Save the Elephant and Other Endangered Species?	452	(2)
Summary	454	(1)
Key Terms	454	(1)
Questions for Review and Discussion	455	(1)
Problems	455	(1)
Working with the Web	456	(1)
Public Choice	457	(312)
Self-Interest and Politics	458	(1)
Public Choice Analysis of Majority Voting	459	(2)
Public Choice Analysis of Politics	461	(2)
Political Competition	461	(1)
Logrolling	462	(1)
Focus: Can You Buy an Election?	463	(6)
Voting	464	(2)
Interest Groups	466	(2)
Bureaucracy	468	(1)
Focus: Economics of the Birds and the Bees	469	(1)
Constitutional Political Economy	470	(2)
Application: Registering Minority Votes	472	(2)
Summary	474	(1)
Key Terms	475	(1)
Questions for Review and Discussion	475	(1)
Problems	475	(1)
Working with the Web	476	(1)
Point/Counterpoint	477	(292)
PART 8 INTERNATIONAL TRADE AND THE GLOBAL ECONOMY	769	(64)
International Trade	771	(28)
The Importance of International Trade	772	(8)
National Involvement in International Trade	773	(1)
Why Trade Is Important: Comparative Advantage	774	(6)
Tariffs and Quotas	780	(1)
The Effects of Artificial Trade Barriers	780	(5)
Welfare Loss from Tariffs	781	(1)
Why Are Tariffs Imposed?	782	(1)
Nontariff Barriers to Trade	782	(1)
A Quota Is a Quota Is a Tariff	783	(2)
The Case for Protection	785	(1)
National Interest Arguments for Protection	785	(1)
Focus: Autos, Peanuts, and Politics: How Quotas Affect You	785	(4)
Industry Arguments for Protection	787	(2)
Focus: ``Fair Trade'' and Protectionism: The Steel Industry	789	(1)
U.S. Tariff Policy	790	(3)
Early Tariff Policy	790	(1)
Modern Tariff Policy	790	(2)
Where Does the United States Stand in the Battle for Free Trade?	792	(1)
Focus: China and the World Trade Organization	793	(1)
Application: NAFTA: Free Trade or Free-for-All?	794	(1)
Summary	795	(1)
Key Terms	796	(1)
Questions for Review and Discussion	796	(1)
Problems	797	(1)
Working with the Web	797	(2)
International Finance	799	(34)
The Foreign Exchange Market	800	(3)
Exchange Rates	800	(2)
Exchange Rate Systems	802	(1)
Focus: The Euro, Europe's New Money	803	(1)
Flexible Exchange Rates	804	(6)
Exchange Rates Between Two Countries	804	(2)
Changes in Flexible Exchange Rates	806	(4)
Fixed Exchange Rates	810	(4)
The Operation of a Fixed Exchange Rate System	810	(2)
Fixed Exchange Rates	812	(2)
Macroeconomic Policy, Exchange Rates, and Trade Balance	814	(1)
Monetary Policy	814	(1)
Focus: Should We Return to a Gold Standard?	815	(1)
Fiscal Policy	815	(1)
The Balance of Payments	816	(3)
Exports and Imports: The Balance of Trade	817	(1)
Net Transfers Abroad	818	(1)
Current Account Balance	818	(1)
Net Capital Movements	818	(1)
Statistical Discrepancy	818	(1)
The Balance of Payments and the Value of the Dollar	819	(1)
The Evolution of International Monetary Institutions	819	(4)
The Decline of the Gold Standard	819	(1)
Bretton Woods and the Postwar System	819	(2)
The Current International Monetary System	821	(2)
Application: The Asian Economic Crisis	823	(2)
Summary	825	(1)
Key Terms	826	(1)
Questions for Review and Discussion	826	(1)
Problem	827	(1)
Working with the Web	828	(1)
Point/Counterpoint	829	(4)
Glossary	833	(12)
Credits	845	(2)
Index	847