Macroeconomics : principles, problems, and policies / 16th ed.

List of Key Graphs p. vi
Preface p. vii
Contributors p. xiii
An Introduction to Economics and the Economy
To the Student p. 2
The Nature and Method of Economics p. 3
The Economic Perspective p. 3
Consider This: Free for All? p. 4
Why Study Economics? p. 5
Economic Methodology p. 6
Macroeconomics and Microeconomics p. 9
Pitfalls to Sound Reasoning p. 10
A Look Ahead p. 12
Last Word: Fast-Food Lines: An Economic Perspective p. 12
Graphs and Their Meaning p. 15
The Economizing Problem p. 22
The Foundation of Economics p. 22
Economics: Employment and Efficiency p. 24
Unemployment, Growth, and the Future p. 28
Consider This: A Matter of Degrees: Is College Worth the Cost? p. 32
Economic Systems p. 33
The Circular Flow Model p. 34
Last Word: September 11, 2001, and the War on Terrorism p. 35
Individual Markets: Demand and Supply p. 39
Markets p. 39
Demand p. 40
Supply p. 45
Supply and Demand: Market Equilibrium p. 48
Consider This: The Cutting Edge p. 50
Application: Government-Set Prices p. 52
Last Word: Ticket Scalping: A Bum Rap? p. 55
Applications and Extensions of Supply and Demand Analysis p. 59
Changes in Supply and Demand p. 1
Preset Prices p. 4
Consider This: Taking Back a "Gift" p. 5
Nonpriced Goods: The American Bison p. 6
Consumer and Producer Surplus p. 7
Last Word: Efficiency Gains from Generic Drugs p. 11
The Market System p. 60
Characteristics of the Market System p. 60
The Market System at Work p. 64
Consider This: McHits and McMisses p. 66
Competition and the "Invisible Hand" p. 69
Last Word: Shuffling the Deck p. 70
The U.S. Economy: Private and Public Sectors p. 73
Households as Income Receivers p. 73
Households as Spenders p. 74
The Business Population p. 75
Legal Forms of Businesses p. 76
The Public Sector: Government's Role p. 79
Consider This: Street Entertainers p. 82
The Circular Flow Revisited p. 83
Government Finance p. 84
Federal Finance p. 85
State and Local Finance p. 87
Last Word: The Financing of Corporations p. 88
The United States in the Global Economy p. 91
International Linkages p. 91
The United States and World Trade p. 92
Specialization and Comparative Advantage p. 96
The Foreign Exchange Market p. 99
Consider This: A Ticket to Ride p. 100
Government and Trade p. 101
Multilateral Trade Agreements and Free-Trade Zones p. 103
Global Competition p. 106
Last Word: Petition of the Candlemakers, 1845 p. 106
Macroeconomic Measurement and Basic Concepts
Measuring Domestic Output and National Income p. 112
Assessing the Economy's Performance p. 112
Gross Domestic Product p. 112
The Expenditures Approach p. 115
Consider This: Stock Answers about Flows p. 117
The Income Approach p. 118
Other National Accounts p. 120
Nominal GDP versus Real GDP p. 123
Shortcomings of GDP p. 125
Last Word: Feeding the GDP Accounts p. 127
Introduction to Economic Growth and Instability p. 131
Economic Growth p. 131
The Business Cycle p. 133
Unemployment p. 135
Inflation p. 141
Consider This: Clipping Coins p. 143
Redistribution Effects of Inflation p. 144
Effects of Inflation on Output p. 147
Last Word: The Stock Market and the Economy p. 149
Basic Macroeconomic Relationships p. 152
The Income-Consumption and Income-Saving Relationships p. 152
Consider This: What Wealth Effect? p. 159
The Interest-Rate-Investment Relationship p. 159
The Multiplier Effect p. 164
Last Word: Squaring the Economic Circle p. 167
Macroeconomic Models and Fiscal Policy
The Aggregate Expenditures Model p. 172
Simplifications p. 172
Consumption and Investment Schedules p. 172
Equilibrium GDP: C + I[subscript g] = GDP p. 173
Other Features of Equilibrium GDP p. 176
Changes in Equilibrium GDP and the Multiplier p. 177
Adding International Trade p. 179
Adding the Public Sector p. 182
Equilibrium versus Full-Employment GDP p. 185
Limitations of the Model p. 187
Last Word: Say's Law, the Great Depression, and Keynes p. 188
Aggregate Demand and Aggregate Supply p. 193
Aggregate Demand p. 193
Aggregate Supply p. 197
Equilibrium and Changes in Equilibrium p. 201
Consider This: Ratchet Effect p. 205
Last Word: Why Is Unemployment in Europe So High? p. 207
The Relationship of the Aggregate Demand Curve to the Aggregate Expenditures Model p. 211
Fiscal Policy p. 214
Legislative Mandates p. 214
Fiscal Policy and the AD-AS Model p. 215
Built-In Stability p. 218
Evaluating Fiscal Policy p. 220
Problems, Criticisms, and Complications p. 223
Last Word: The Leading Indicators p. 227
Current Thinking on Fiscal Policy p. 228
Money, Banking, and Monetary Policy
Money and Banking p. 232
The Functions of Money p. 232
The Supply of Money p. 233
Consider This: Are Credit Cards Money? p. 236
What "Backs" the Money Supply? p. 236
The Demand for Money p. 238
The Money Market p. 240
The Federal Reserve and the Banking System p. 242
Recent Developments in Money and Banking p. 245
Last Word: The Global Greenback p. 248
How Banks and Thrifts Create Money p. 252
The Balance Sheet of a Commercial Bank p. 252
Prologue: The Goldsmiths p. 252
A Single Commercial Bank p. 253
The Banking System: Multiple-Deposit Expansion p. 260
Last Word: The Bank Panics of 1930 to 1933 p. 265
Monetary Policy p. 268
Consolidated Balance Sheet of the Federal Reserve Banks p. 268
Tools of Monetary Policy p. 270
Monetary Policy, Real GDP, and the Price Level p. 276
Monetary Policy in Action p. 279
Consider This: Pushing on a String p. 282
The "Big Picture" p. 286
Last Word: For the Fed, Life Is a Metaphor p. 287
Long-Run Perspectives and Macroeconomic Debates
Extending the Analysis of Aggregate Supply p. 292
From Short Run to Long Run p. 292
Applying the Extended AD-AS Model p. 295
The Inflation-Unemployment Relationship p. 297
The Long-Run Phillips Curve p. 300
Taxation and Aggregate Supply p. 302
Consider This: Sherwood Forest p. 304
Last Word: Has the Impact of Oil Prices Diminished? p. 305
Economic Growth p. 308
Ingredients of Growth p. 308
Production Possibilities Analysis p. 309
U.S. Economic Growth Rates p. 312
Accounting for Growth p. 312
Consider This: Economic Growth Rates Matter! p. 313
The Productivity Acceleration: A New Economy? p. 316
Is Growth Desirable and Sustainable? p. 320
Last Word: Women and Economic Growth p. 322
Deficits, Surpluses, and the Public Debt p. 325
Deficits, Surpluses, and Debt: Definitions p. 325
Budget Philosophies p. 325
The Public Debt: Facts and Figures p. 326
False Concerns p. 329
Substantive Issues p. 330
Deficits and Surpluses: 1992-2012 p. 332
Last Word: The Long-Run Fiscal Imbalance: Social Security p. 334
Disputes over Macro Theory and Policy p. 338
Some History: Classical Economics and Keynes p. 338
What Causes Macro Instability? p. 340
Does the Economy "Self-Correct"? p. 344
Rules or Discretion? p. 347
Consider This: On the Road Again p. 348
Summary of Alternative Views p. 350
Last Word: The Taylor Rule: Could a Robot Replace Alan Greenspan? p. 351
International Economics and the World Economy
International Trade p. 356
Some Key Facts p. 356
The Economic Basis for Trade p. 357
Comparative Advantage: Graphical Analysis p. 358
Supply and Demand Analysis of Exports and Imports p. 363
Trade Barriers p. 366
The Case for Protection: A Critical Review p. 369
Consider This: Shooting Yourself in the Foot p. 370
Last Word: The WTO Protests p. 372
The World Trade Organization p. 373
Exchange Rates, the Balance of Payments, and Trade Deficits p. 377
Financing International Trade p. 377
The Balance of Payments p. 378
Flexible Exchange Rates p. 381
Consider This: The Big Mac Index p. 383
Fixed Exchange Rates p. 386
International Exchange-Rate Systems p. 388
Recent U.S. Trade Deficits p. 392
Last Word: Speculation in Currency Markets p. 394
The Economics of Developing Countries p. 397
The Rich and the Poor p. 1
Obstacles to Economic Development p. 3
The Vicious Circle p. 10
Role of Government p. 11
Role of Advanced Nations p. 12
Where from Here? p. 15
Last Word: Famine in Africa p. 16
Transition Economies: Russia and China p. 398
Ideology and Institutions p. 1
State Ownership and Central Planning p. 2
Problems with Central Planning p. 3
Collapse of the Soviet Economy p. 5
The Russian Transition to a Market System p. 6
Market Reforms in China p. 10
Outcomes and Prospects p. 11
Conclusion p. 13
Last Word: Police Smash Down Smirnov's Doors p. 14
Glossary p. 1
Index p. 1