Section 1
Basic Economic Concepts 1
MODULE 1 The Study of Economics 3
MODULE 2 The Production Possibility Frontier Model 11
MODULE 3 Comparative Advantage and Trade 18
Section 2
Supply and Demand 31
MODULE 4 Demand 32
MODULE 5 Supply and Equilibrium 43
MODULE 6 Changes in Equilibrium 56
MODULE 7 Price Controls and Quantity Controls 63
MODULE 8 International Trade 77
Section 3
Macroeconomic Measurement 95
MODULE 9 Introduction to Macroeconomics 96
MODULE 10 The Circular-Flow Diagram and the National Accounts 105
MODULE 11 Gross Domestic Product (GDP) 111
MODULE 12 Interpreting Real Gross Domestic Product 118
Section 4
Unemployment and Inflation 131
MODULE 13 Defining Unemployment 132
MODULE 14 Categories of Unemployment 140
MODULE 15 The Costs of Inflation 149
MODULE 16 Measuring Inflation 157
Section 5
Long-Run Economic Growth 171
MODULE 17 Sources of Long-Run Economic Growth 172
MODULE 18 Productivity and Growth 179
MODULE 19 Long-Run Growth Policy 189
Section 6
Savings, Investment Spending, and the Financial System 205
MODULE 20 Savings and Investment Spending 206
MODULE 21 The Market for Loanable Funds 212
MODULE 22 The Time Value of Money 222
MODULE 23 The Financial System 228
Section 7
Income and Expenditure 241
MODULE 24 The Multiplier 242
MODULE 25 Consumption and Investment Spending 247
MODULE 26 The Income–Expenditure Model 258
Section 8
Aggregate Demand and Aggregate Supply 273
MODULE 27 Aggregate Demand 274
MODULE 28 Aggregate Supply 284
MODULE 29 The AD–AS Model 296
Section 9
Fiscal Policy 313
MODULE 30 Fiscal Policy Basics 314
MODULE 31 Fiscal Policy and the Multiplier 323
MODULE 32 Budget Deficits and Public Debt 328
Section 10
Money, Banking, and the Federal Reserve System 345
MODULE 33 Defining and Measuring Money 346
MODULE 34 Banking and Money Creation 353
MODULE 35 The Federal Reserve System 362
Section 11
Monetary Policy 377
MODULE 36 The Federal Reserve and Monetary Policy 378
MODULE 37 The Money Market 383
MODULE 38 Monetary Policy and the Interest Rate 392
MODULE 39 Money, Output, and Prices in the Long Run 402
Section 12
Policy Responses to Unemployment and Inflation 413
MODULE 40 Inflation, Disinflation, and Deflation 414
MODULE 41 The Phillips Curve 423
MODULE 42 Crises and Consequences 435
Section 13
Open-Economy Macroeconomics 453
MODULE 43 Capital Flows and the Balance of Payments 454
MODULE 44 The Foreign Exchange Market 469
MODULE 45 Exchange Rate Policy 473
MODULE 46 Exchange Rates and Macroeconomic Policy 479
Section 14
Macroeconomics: Events and Ideas 489
MODULE 47 History and Alternative Views of Macroeconomics 490
MODULE 48 The Modern Macroeconomic Consensus 502
Appendices
APPENDIX A Graphs in Economics A-1
APPENDIX B Macroeconomic Data Tables B-1
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