Principles of Macroeconomics

Description

Special edition for Georgia Southern University. Cover (Principles of Macroeconomics)......Page 1 Title Page......Page 2 Copyright......Page 3 Brief Contents......Page 4 Contents......Page 6 Preface......Page 20 Acknowledgments......Page 34 About the Authors......Page 39 Part I - Introduction......Page 42 1 - Five Foundations of Economics......Page 43 What Is Economics?......Page 45 What Are Five Foundations of Economics?......Page 46 Conclusion......Page 59 2 - Model Building and Gains from Trade......Page 65 How Do Economists Study the Economy?......Page 67 What Is a Production Possibilities Frontier?......Page 72 What Are the Benefits of Specialization and Trade?......Page 78 What Is the Trade off between Having More Now and Having More Later?......Page 85 Conclusion......Page 89 Graphs That Consist of One Variable......Page 96 Graphs That Consist of Two Variables......Page 98 Cautions in Interpreting Numerical Graphs......Page 104 3 - The Market at Work: Supply and Demand......Page 107 What Are the Fundamentals of Markets?......Page 109 What Determines Demand?......Page 112 What Determines Supply?......Page 122 How Do Supply and Demand Interact to Create Equilibrium?......Page 131 Conclusion......Page 134 Appendix 3A: Changes in Both Demand and supply......Page 141 4 - Market Outcomes and Tax Incidence......Page 147 What Are Consumer Surplus and Producer Surplus?......Page 149 When Is a Market Efficient?......Page 155 Why Do Taxes Create Deadweight Loss in Otherwise Efficient Markets?......Page 159 Conclusion......Page 174 5 - Price Controls......Page 181 When Do Price Ceilings Matter?......Page 183 What Effects Do Price Ceilings Have on Economic Activity?......Page 189 When Do Price Floors Matter?......Page 193 What Effects Do Price Floors Have on Economic Activity?......Page 199 Conclusion......Page 206 Part II - Macroeconomic Basics......Page 212 6 - Introduction to Macroeconomics and Gross Domestic Product......Page 213 How Is Macroeconomics Different from Microeconomics?......Page 215 What Does GDP Tell Us about the Economy?......Page 216 How Is GDP Computed?......Page 223 What Are Some Shortcomings of GDP Data?......Page 237 Conclusion......Page 245 7 - Unemployment......Page 251 What Are the Major Reasons for Unemployment?......Page 253 What Can We Learn from the Employment Data?......Page 263 Conclusion......Page 274 8 - The Price Level and Inflation......Page 281 How Is Inflation Measured?......Page 283 What Problems Does Inflation Bring?......Page 298 What Is the Cause of Inflation?......Page 305 Conclusion......Page 308 9 - Savings, Interest Rates,and the Market for Loanable Funds......Page 315 What Is the Loanable Funds Market?......Page 317 What Factors Shift the Supply of Loanable Funds?......Page 323 What Factors Shift the Demand for Loanable Funds?......Page 332 How Do We Apply the Loanable Funds Market Model?......Page 335 Conclusion......Page 339 10 - Financial Markets and Securities......Page 345 How Do Financial Markets Help the Economy?......Page 347 What Are the Key Financial Tools for the Macroeconomy?......Page 350 Conclusion......Page 365 Part III - The Long and Short of Macroeconomics......Page 372 11 - Economic Growth and the Wealth of Nations......Page 373 Why Does Economic Growth Matter?......Page 375 How Do Resources and Technology Contribute to Economic Growth?......Page 388 What Institutions Foster Economic Growth?......Page 396 Conclusion......Page 401 12 - Growth Theory......Page 407 How Do Macroeconomic Theories Evolve?......Page 409 What Is the Solow Growth Model?......Page 411 How Does Technology Affect Growth?......Page 421 Why Are Institutions the Key to Economic Growth?......Page 426 Conclusion......Page 435 13 - The Aggregate Demand–Aggregate Supply Model......Page 441 What Is the Aggregate Demand–Aggregate Supply Model?......Page 443 What Is Aggregate Demand?......Page 444 What Is Aggregate Supply?......Page 453 How Does the Aggregate Demand–Aggregate Supply Model Help Us Understand the Economy?......Page 462 Conclusion......Page 471 14 - The Great Recession, the Great Depression, and Great Macroeconomic Debates......Page 477 Exactly What Happened During the Great Recession and the Great Depression?......Page 479 What Are the Major Debates in Macroeconomics?......Page 491 Conclusion......Page 494 Appendix 14A: The Aggregate Expenditures Model The Components of Aggregate Expenditures......Page 500 What Are the Implications of the AE Model?......Page 510 Conclusion......Page 514 Part IV - Fiscal Policy......Page 518 15 - Federal Budgets: The Tools of Fiscal Policy......Page 519 How Does the Government Spend?......Page 521 How Does the Government Tax?......Page 529 What Are Budget Deficits?......Page 535 Conclusion......Page 544 16 - Fiscal Policy......Page 547 What Is Fiscal Policy?......Page 549 What Are the Shortcomings of Fiscal Policy?......Page 561 What Is Supply-Side Fiscal Policy?......Page 567 Conclusion......Page 573 Part V - Monetary Policy......Page 578 17 - Money and the Federal Reserve......Page 579 What Is Money?......Page 581 How Do Banks Create Money?......Page 587 How Does the Federal Reserve Control the Money Supply?......Page 595 Conclusion......Page 607 18 - Monetary Policy......Page 611 What Is the Effect of Monetary Policy in the Short Run?......Page 613 Why Doesn’t Monetary Policy Always Work?......Page 621 What Is the Phillips Curve?......Page 627 Conclusion......Page 639 Part VI - International Economics......Page 646 19 - International Trade......Page 647 Is Globalization for Real?......Page 649 How Does International Trade Help the Economy?......Page 655 What Are the Effects of Tariffs and Quotas?......Page 661 Conclusion......Page 670 20 - International Finance......Page 675 Why Do Exchange Rates Rise and Fall?......Page 677 What Is Purchasing Power Parity?......Page 690 What Causes Trade Deficits?......Page 694 Conclusion......Page 707 Glossary......Page 712 Credits......Page 720 Index......Page 724