Preface xvii

part 1

Introduction

Chapter 1

First Principles 5

Chapter 2

Economic Models: Trade-offs and Trade 25

Appendix

Graphs in Economics 51

part 2

Supply and Demand

Chapter 3

Supply and Demand 67

Chapter 4

Price Controls and Quotas: Meddling with Markets 103

Chapter 5

International Trade 131

Appendix

Consumer and Producer Surplus 163

part 3

Introduction to Macroeconomics

Chapter 6

Macroeconomics: The Big Picture 169

Chapter 7

GDP and the CPI: Tracking the Macroeconomy 191

Chapter 8

Unemployment and Inflation 217

part 4

Long-Run Economic Growth

Chapter 9

Long-Run Economic Growth 245

Chapter 10

Savings, Investment Spending, and the Financial System 279

Appendix

Toward a Fuller Understanding of Present Value 313

part 5

Short-Run Economic Fluctuations

Chapter 11

Income and Expenditure 317

Appendix

Deriving the Multiplier Algebraically 347

Chapter 12

Aggregate Demand and Aggregate Supply 349

part 6

Stabilization Policy

Chapter 13

Fiscal Policy 385

Appendix

Taxes and the Multiplier 417

Chapter 14

Money, Banking, and the Federal Reserve System 419

Chapter 15

Monetary Policy 455

Appendix

Reconciling the Two Models of the Interest Rate 481

Chapter 16

Inflation, Disinflation, and Deflation 485

Chapter 17

Crises and Consequences 513

part 7

Events and Ideas

Chapter 18

Macroeconomics: Events and Ideas 539

part 8

The Open Economy

Chapter 19

Open-Economy Macroeconomics  563

Macroeconomic Data Tables M-1

Solutions to “Check Your Understanding” Questions S-1

Glossary G-1

Index I-1