MACROECONOMICS
ABOUT THE AUTHORS
PREFACE
Ordinary Business of Life
1.1: The Invisible Hand
1.2: My Benefit, Your Cost
1.3: Good Times, Bad Times
1.4: Onward and Upward
1.5: An Engine for Discovery
1.6: KEY TERMS
First Principles
1.1 Principles That Underlie Individual Choice: The Core of Economics
1.2 Interaction: How Economies Work
1.3 Economy-Wide Interactions
1.4 SUMMARY
1.5 KEY TERMS
1.6 PROBLEMS
Economic Models: Trade-offs and Trade
2.1 Models in Economics: Some Important Examples
2.2 Using Models
2.3 SUMMARY
2.4 KEY TERMS
2.5 PROBLEMS
Supply and Demand
3.1 Supply and Demand: A Model of a Competitive Market
3.2 The Demand Curve
3.3 The Supply Curve
3.4 Supply, Demand, and Equilibrium
3.5 Changes in Supply and Demand
3.6 Competitive Markets-And Others
3.7 SUMMARY
3.8 KEY TERMS
3.9 PROBLEMS
Price Controls and Quotas: Meddling with Markets
4.1 Why Governments Control Prices
4.2 Price Ceilings
4.3 Price Floors
4.4 Controlling Quantities
4.5 SUMMARY
4.6 KEY TERMS
4.7 PROBLEMS
International Trade
5.1 Comparative Advantage and International Trade
5.2 Supply, Demand, and International Trade
5.3 The Effects of Trade Protection
5.4 The Political Economy of Trade Protection
5.5 SUMMARY
5.6 KEY TERMS
5.7 PROBLEMS
Macroeconomics: The Big Picture
6.1 The Nature of Macroeconomics
6.2 The Business Cycle
6.3 Long-Run Economic Growth
6.4 Inflation and Deflation
6.5 International Imbalances
6.6 Summary
6.7 KEY TERMS
6.8 PROBLEMS
GDP and the CPI: Tracking the Macroeconomy
7.1 The National Accounts
7.2 Real GDP: A Measure of Aggregate Output
7.3 Price Indexes and the Aggregate Price Level
7.4 SUMMARY
7.5 KEY TERMS
7.6 PROBLEMS
Unemployment and Inflation
8.1 The Unemployment Rate
8.2 The Natural Rate of Unemployment
8.3 Inflation and Deflation
8.4 SUMMARY
8.5 KEY TERMS
8.6 PROBLEMS
Long-Run Economic Growth
9.1 Comparing Economies Across Time and Space
9.2 The Sources of Long-Run Growth
9.3 Why Growth Rates Differ
9.4 Success, Disappointment, and Failure
9.5 Is World Growth Sustainable?
9.6 SUMMARY
9.7 KEY TERMS
9.8 PROBLEMS
Savings, Investment Spending, and the Financial System
10.1 Matching Up Savings and Investment Spending
10.2 The Financial System
10.3 Financial Fluctuations
10.4 SUMMARY
10.5 KEY TERMS
10.6 PROBLEMS
Income and Expenditure
11.1 The Multiplier: An Informal Introduction
11.2 Consumer Spending
11.3 Investment Spending
11.4 The Income-Expenditure Model
11.5 SUMMARY
11.6 KEY TERMS
11.7 PROBLEMS
Aggregate Demand and Aggregate Supply
12.1 Aggregate Demand
12.2 Aggregate Supply
12.3 The AD-AS Model
12.4 Macroeconomic Policy
12.5 SUMMARY
12.6 KEY TERMS
12.7 PROBLEMS
Fiscal Policy
13.1 Fiscal Policy: The Basics
13.2 Fiscal Policy and the Multiplier
13.3 The Budget Balance
13.4 Long-Run Implications of Fiscal Policy
13.5 SUMMARY
13.6 KEY TERMS
13.7 PROBLEMS
Money, Banking, and the Central Banking System
14.1 The Meaning of Money
14.2 The Monetary Role of Banks
14.3 Determining the Money Supply
14.4 Central Banks
14.5 The Evolution of the Canadian Banking System
14.6 SUMMARY
14.7 KEY TERMS
14.8 PROBLEMS
Monetary Policy
15.1 The Demand for Money
15.2 Money and Interest Rates
15.3 Monetary Policy and Aggregate Demand
15.4 Money, Output, and Prices in the Long Run
15.5 SUMMARY
15.6 KEY TERMS
15.7 PROBLEMS
Inflation, Disinflation, and Deflation
16.1 Money and Inflation
16.2 Moderate Inflation and Disinflation
16.3 Inflation and Unemployment in the Long Run
16.4 Deflation
16.5 SUMMARY
16.6 KEY TERMS
16.7 PROBLEMS
Crises and Consequences
17.1 Banking: Benefits and Dangers
17.2 Banking Crises and Financial Panics
17.3 The Consequences of Banking Crises
17.4 The 2008 Crisis and Its Aftermath
17.5 Regulation in the Wake of the Crisis
17.6 SUMMARY
17.7 KEY TERMS
17.8 PROBLEMS
Macroeconomics: Events and Ideas
18.1 Classical Macroeconomics
18.2 The Great Depression and the Keynesian Revolution
18.3 Challenges to Keynesian Economics
18.4 Rational Expectations, Real Business Cycles, and New Classical Macroeconomics
18.5 Consensus and Conflict in Modern Macroeconomics
18.6 SUMMARY
18.7 KEY TERMS
18.8 PROBLEMS
Open-Economy Macroeconomics
19.1 Capital Flows and the Balance of Payments
19.2 The Role of the Exchange Rate
19.3 Exchange Rate Policy
19.4 Exchange Rates and Macroeconomic Policy
19.5 SUMMARY
19.6 KEY TERMS
19.7 PROBLEMS
Graphs in Economics
Graphs, Variables, Economic Models
How Graphs Work
Key Concept: The Slope of a Curve
Calculating the Area Below or Above a Curve
That Depict Numerical Information
PROBLEMS
The Algebra of Demand, Supply, and Equilibrium
Demand Curve
Supply Curve
Equilibrium
PROBLEMS
Consumer and Producer Surplus
Surplus and the Demand Curve
Surplus and the Supply Curve
Gains from Trade
PROBLEMS
Deriving the Multiplier Algebraically
PROBLEMS
Taxes and the Multiplier
Autonomous Taxation and the Multipliers
Endogenous Taxation and the Multipliers
PROBLEMS
Reconciling the Two Models of the Interest Rate
Interest Rate in the Short Run
Interest Rate in the Long Run
PROBLEMS