Principles of Macroeconomics for AP® Courses 2e

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Principles of Macroeconomics for AP® Courses 2e......Page 3 3. About Principles of Macroeconomics for AP® Courses 2e......Page 9 4. Additional resources......Page 13 5. About the authors......Page 15 Chapter 1. Welcome to Economics!......Page 17 1.1. What Is Economics, and Why Is It Important?*......Page 18 1.2. Microeconomics and Macroeconomics*......Page 22 1.3. How Economists Use Theories and Models to Understand Economic Issues*......Page 23 1.4. How To Organize Economies: An Overview of Economic Systems*......Page 26 Glossary......Page 31 Chapter 2. Choice in a World of Scarcity......Page 35 2.1. How Individuals Make Choices Based on Their Budget Constraint*......Page 36 2.2. The Production Possibilities Frontier and Social Choices*......Page 41 2.3. Confronting Objections to the Economic Approach*......Page 46 Glossary......Page 50 Chapter 3. Demand and Supply......Page 53 3.1. Demand, Supply, and Equilibrium in Markets for Goods and Services*......Page 54 3.2. Shifts in Demand and Supply for Goods and Services*......Page 60 3.3. Changes in Equilibrium Price and Quantity: The Four-Step Process*......Page 69 3.4. Price Ceilings and Price Floors*......Page 75 3.5. Demand, Supply, and Efficiency*......Page 79 Glossary......Page 83 Chapter 4. Labor and Financial Markets......Page 91 4.1. Demand and Supply at Work in Labor Markets*......Page 92 4.2. Demand and Supply in Financial Markets*......Page 100 4.3. The Market System as an Efficient Mechanism for Information*......Page 106 Glossary......Page 111 Chapter 5. The Macroeconomic Perspective......Page 115 5.1. Measuring the Size of the Economy: Gross Domestic Product*......Page 117 5.2. Adjusting Nominal Values to Real Values*......Page 126 5.3. Tracking Real GDP over Time*......Page 132 5.4. Comparing GDP among Countries*......Page 134 5.5. How Well GDP Measures the Well-Being of Society*......Page 137 Glossary......Page 140 Chapter 6. Economic Growth......Page 145 6.1. The Relatively Recent Arrival of Economic Growth*......Page 146 6.2. Labor Productivity and Economic Growth*......Page 149 6.3. Components of Economic Growth*......Page 156 6.4. Economic Convergence*......Page 160 Glossary......Page 166 Chapter 7. Unemployment......Page 171 7.1. How Economists Define and Compute Unemployment Rate*......Page 172 7.2. Patterns of Unemployment*......Page 177 7.3. What Causes Changes in Unemployment over the Short Run*......Page 182 7.4. What Causes Changes in Unemployment over the Long Run*......Page 186 Glossary......Page 194 Chapter 8. Inflation......Page 199 8.1. Tracking Inflation*......Page 200 8.2. How to Measure Changes in the Cost of Living*......Page 204 8.3. How the U.S. and Other Countries Experience Inflation*......Page 209 8.4. The Confusion Over Inflation*......Page 214 8.5. Indexing and Its Limitations*......Page 219 Glossary......Page 222 Chapter 9. The International Trade and Capital Flows......Page 227 9.1. Measuring Trade Balances*......Page 228 9.2. Trade Balances in Historical and International Context*......Page 232 9.3. Trade Balances and Flows of Financial Capital*......Page 234 9.4. The National Saving and Investment Identity*......Page 237 9.5. The Pros and Cons of Trade Deficits and Surpluses*......Page 241 9.6. The Difference between Level of Trade and the Trade Balance*......Page 243 Glossary......Page 246 Chapter 10. The Aggregate Demand/Aggregate Supply Model......Page 251 10.1. Macroeconomic Perspectives on Demand and Supply*......Page 253 10.2. Building a Model of Aggregate Demand and Aggregate Supply*......Page 254 10.3. Shifts in Aggregate Supply*......Page 260 10.4. Shifts in Aggregate Demand*......Page 262 10.5. How the AD/AS Model Incorporates Growth, Unemployment, and Inflation*......Page 266 10.6. Keynes’ Law and Say’s Law in the AD/AS Model*......Page 269 Glossary......Page 271 Chapter 11. The Keynesian Perspective......Page 279 11.1. Aggregate Demand in Keynesian Analysis*......Page 280 11.2. The Building Blocks of Keynesian Analysis*......Page 284 11.3. The Expenditure-Output (or Keynesian Cross) Model*......Page 287 11.4. The Phillips Curve*......Page 305 11.5. The Keynesian Perspective on Market Forces*......Page 309 Glossary......Page 311 Chapter 12. The Neoclassical Perspective......Page 317 12.1. The Building Blocks of Neoclassical Analysis*......Page 319 12.2. The Policy Implications of the Neoclassical Perspective*......Page 324 12.3. Balancing Keynesian and Neoclassical Models*......Page 331 Glossary......Page 333 Chapter 13. Money and Banking......Page 337 13.1. Defining Money by Its Functions*......Page 338 13.2. Measuring Money: Currency, M1, and M2*......Page 340 13.3. The Role of Banks*......Page 343 13.4. How Banks Create Money*......Page 348 Glossary......Page 352 Chapter 14. Monetary Policy and Bank Regulation......Page 357 14.1. The Federal Reserve Banking System and Central Banks*......Page 358 14.2. Bank Regulation*......Page 361 14.3. How a Central Bank Executes Monetary Policy*......Page 364 14.4. Monetary Policy and Economic Outcomes*......Page 367 14.5. Pitfalls for Monetary Policy*......Page 372 Glossary......Page 379 Chapter 15. Exchange Rates and International Capital Flows......Page 383 15.1. How the Foreign Exchange Market Works*......Page 384 15.2. Demand and Supply Shifts in Foreign Exchange Markets*......Page 392 15.3. Macroeconomic Effects of Exchange Rates*......Page 397 15.4. Exchange Rate Policies*......Page 399 Glossary......Page 406 Chapter 16. Government Budgets and Fiscal Policy......Page 411 16.1. Government Spending*......Page 412 16.2. Taxation*......Page 415 16.3. Federal Deficits and the National Debt*......Page 417 16.4. Using Fiscal Policy to Fight Recession, Unemployment, and Inflation*......Page 420 16.5. Automatic Stabilizers*......Page 423 16.6. Practical Problems with Discretionary Fiscal Policy*......Page 425 16.7. The Question of a Balanced Budget*......Page 429 Glossary......Page 431 Chapter 17. The Impacts of Government Borrowing......Page 437 17.1. How Government Borrowing Affects Investment and the Trade Balance*......Page 438 17.2. Fiscal Policy, Investment, and Economic Growth*......Page 441 17.3. How Government Borrowing Affects Private Saving*......Page 446 17.4. Fiscal Policy and the Trade Balance*......Page 447 Glossary......Page 452 Chapter 18. Macroeconomic Policy Around the World......Page 455 18.1. The Diversity of Countries and Economies across the World*......Page 457 18.2. Improving Countries’ Standards of Living*......Page 460 18.3. Causes of Unemployment around the World*......Page 465 18.4. Causes of Inflation in Various Countries and Regions*......Page 466 18.5. Balance of Trade Concerns*......Page 467 Glossary......Page 472 A.1. Algebraic Models......Page 477 A.3. Displaying Data Graphically and Interpreting the Graph......Page 481 A.5. Review Questions......Page 492 B.1. What Is an Indifference Curve?......Page 493 B.2. Utility-Maximizing with Indifference Curves......Page 495 B.3. Changes in Income......Page 496 B.4. Responses to Price Changes: Substitution and Income Effects......Page 497 B.5. Indifference Curves with Labor-Leisure and Intertemporal Choices......Page 498 B.6. Sketching Substitution and Income Effects......Page 501 B.7. Key Concepts and Summary......Page 504 B.8. Review Questions......Page 505 C.1. Applying Present Discounted Value to a Stock......Page 507 C.3. Other Applications......Page 508 Chapter 2......Page 511 Chapter 3......Page 512 Chapter 4......Page 514 Chapter 6......Page 517 Chapter 8......Page 519 Chapter 9......Page 521 Chapter 10......Page 523 Chapter 11......Page 524 Chapter 13......Page 527 Chapter 15......Page 528 Chapter 16......Page 529 Chapter 17......Page 531 Chapter 18......Page 532 References......Page 535 Index......Page 543 APMacroeconomics2e-cover.pdf......Page 0 Blank Page......Page 2