
Introductory Economics
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Introductory Economics deals with the national economy as a whole—macroeconomics, in terms of inflation and unemployment. The book also discusses individual economic decision-makers—microeconomics, in view of the problems of scarcity and choice. Macroeconomics uses the market model of demand and supply as a tool to analyze the causes of, and present some cures for modern economic ailments. The text examines the economics of government fiscal policies with the framework of an aggregate demand and supply model. The book compares monetary policy and fiscal policy, explains the monetarist model of economic activity, and also investigates the roles of money, credit, interest rates. These economic activities have international consequences such as in trade, exchange rates, and on prevailing and future national economic policies. In microeconomics, the book focuses on the economics of exchange, the market mechanisms that increase the gains from trade, and the problems of choice facing consumers and producers in a competitive market. The text also tackles the problems found in resource markets (labor, natural resources, energy), in market failure, as well as analyzes the role of government. Economists, sociologists, students of economics or business, general readers interested in real-world economics, and policy makers involved in national economic development will find the book valuable.
Table of Contents
Preface
Part 1 Tools and Problems
Chapter 1 Macroeconomic Problems
What Is Economics?
Macro- Versus Microeconomics
Macroeconomics Goals and Problems
The Great Depression
The Forties
The Fifties
The Sixties
The Phillips Curve
The Seventies
What Happened to the Phillips Curve?
The Eighties and Beyond
Summary
Discussion Questions
Test Yourself
Economic Controversies I: Another Great Depression?
The Coming Bust
We Can Manage Prosperity
Discussion Questions
Chapter 2 Supply and Demand
The Concept of Demand
The Demand Curve
The Concept of Supply
The Supply Curve
Changes in Supply
The Market at Work
Some Applications
Inflation: A Preview
Review of Market Actions
Summary
Discussion Questions
Test Yourself
Chapter 3 The Problem of Unemployment
The Unemployment Rate
The Labor Market
Cyclical Unemployment
Structural Unemployment
Frictional Unemployment
Unemployment Insurance
The Goal of Full Employment
How Serious Is the Unemployment Problem?
Summary
Discussion Questions
Test Yourself
Chapter 4 Understanding Inflatio
What Is Inflation?
The Inflation Record
Economic Effects of Inflation
The Role of Expectations
Winners and Losers
The Power of Compound Inflation
Coping with Inflation
Measuring Inflation
Three Inflation Measures
Real Versus Nominal Values
Summary
Discussion Questions
Test Yourself
Economic Controversies II: Inflation or Unemployment?
Winners and Losers
Unemployment Is More Important
Fight Inflation First
Discussion Questions
Part 2 A Simple Model of the Economy
Chapter 5 Measuring Economic Activity
Gross National Product
GNP as a Measure of Well-Being
Three Views of GNP
A Grain of Salt
Real Gross National Product
Per Capita RGNP
International Comparisons
Summary
Discussion Questions
Test Yourself
Chapter 6 Aggregate Demand
Spending and Income
Macroeconomic Equilibrium
Is Equilibrium Good?
Consumption Spending
Investment Spending
Government Spending
Net Export Spending
The Aggregate Demand Curve
Changes in Aggregate Demand
Slope of the AD Curve
Appendix: The Keynesian 45-Degree-Line Model
Summary
Discussion Questions
Test Yourself
Chapter 7 Aggregate Supply and the Economy
Aggregate Supply
The Aggregate Supply Curve
Changes in Aggregate Supply
Macroeconomic Equilibrium
Inventory Adjustments
Causes of Unemployment
Causes of Inflation
The Old-Time Religion
Wage and Price Controls
Indexation
Increasing Aggregate Supply
Winners and Losers from Economic Policies
Summary
Discussion Questions
Test Yourself
Economic Controversies III: Wage and Price Controls
Controls Are Useful
Price Controls Are Bad
Discussion Questions
Chapter 8 Fiscal Policy
The Role of Government
Government Spending
The Multiplier
The Multiplier in the Real World
Taxes
The Balanced-Budget Multiplier
Different Types of Taxes
The Total Tax Burden
Tax Expenditures
Transfer Payments
Automatic Stabilizers
Advantages and Disadvantages of Fiscal Policies
Deficit Spending and the National Debt
Summary
Discussion Questions
Test Yourself
Economic Controversies IV: Taxes and the Laffer Curve 204
The Tax Wedge
Cut Taxes Now!
Don't Bet on the Lafferites
Discussion Questions
Part 3 Money, Credit, and the Economy
Chapter 9 Money and Banking
The Money Supply
Money Substitutes
The Interest Rate
Money and Banks
Fractional-Reserve Banking
How Banks "Create" Money
The Fed
Open Market Operations
Reserve Requirement Policy
Discount Rate Policy
Summary
Discussion Questions
Test Yourself
Chapter 10 Money, Credit, and the Economy
The Credit Market
The Stock Market
Demand for Credit
The Credit Demand Curve
The Supply of Credit
The Credit Market at Work
The Inflation Premium
Disintermediation
The Real Interest Rate
Investment and the Credit Market
Monetary Policy
Summary
Discussion Questions
Test Yourself
Economic Controversies V: Credit Market Controls?
Credit Regulations Needed
Deregulate the Credit Market
Discussion Questions
Chapter 11 Monetary Versus Fiscal Policy
Expansionary Monetary Policies
Expansionary Fiscal Policies
Public Versus Private Sector Growth
Inflation in the Long Run
Advantages and Disadvantages
Contractionary Policies
Financing Government Spending
Borrowing from the Public
Borrowing from the FRS
Accommodating Monetary Policy
Conflicting Monetary Policy
Summary
Discussion Questions
Test Yourself
Chapter 12 The Monetarists
The Equation of Exchange
The Barter Economy
Money as a Commodity
Money and the Economy
Monetary Policy: The Monetarist View
Fiscal Policy: The Monetarist View
Monetarist Policy Recommendations
Criticisms of Monetary Policies
Friedman's Policy of Rules
Who's Right, Here?
Summary
Discussion Questions
Test Yourself
Economic Controversies VI: Independence of the Federal Reserve System
End the FRS' Independence
Keep the FRS Independent
Discussion Questions
Part 4 International Economics
Chapter 13 International Trade
Why Do Nations Trade?
Gains from Trade
Comparative Advantage in the Real World
Trade Restrictions
Who Pays the Tariff?
The Rationale of Barriers to Trade
The Balance of Payments
Stages of Balance of Payments
The Balance of Trade
Summary
Discussion Questions
Test Yourself
Chapter 14 The Foreign Exchange Market
The Exchange Rate
The Foreign Exchange Market
The Foreign Exchange Market at Work
Exchange Market Intervention
Fixed Exchange Rates
Summary
Discussion Questions
Test Yourself
Economic Controversies VII: Flexible or Fixed Exchange Rates?
Fixed Exchange Rates
Let Exchange Rates Float
Discussion Questions
Chapter 15 International Economics
Trade and the Economy
International Credit Markets
Eurodollars
Monetary Policy with Flexible Exchange Rates
Fiscal Policy with Flexible Exchange Rates
Economic Policy with Flexible Exchange Rates
Economi.c Policy with Intervention
Fixed Exchange Rates
International Economic Policies
Summary
Discussion Questions
Test Yourself
Chapter 16 Problems, Coals, and Trade-Offs
Macroeconomic Goals
International Economic Goals
Policy Tools
Trade-Offs in Economic Policies
Economic Policy Choices
Policy Problems
Setting National Priorities
Summary
Discussion Questions
Test Yourself
Economic Controversies VIII: Defending the Dollar
Defend the Dollar!
Fight Inflation First
Let the Dollar Fall
Discussion Questions
Part 5 The Economics of Exchange
Chapter 17 Scarcity and Choice
The Problem of Scarcity
Changing Trade-Offs
Scarcity and Choice for the Individual
Scarcity and Choice for the Business Firm
Scarcity and Choice for Society
Economic Growth
Real World Economics: lim Daniels Has a Hangover?
Summary
Discussion Questions
Test Yourself
Chapter 18 Specialization and Exchange
A Barter Economy
The Theory of Comparative Advantage
Mutually Advantageous Exchange
The Gains from Trade
Specialization in the Real World
Comparative Advantage in the Real World
The Role of Money
Limits to Exchange
Distribution of the Gain
Other Reasons for Exchange
Real World Economics: Bullish on Wall Street
Summary
Discussion Questions
Test Yourself
Chapter 19 Demand and Supply: The Micro Side
The Role of the Market
How the Market Works
The Concept of Demand
The Demand Curve
The Concept of Supply
The Supply Curve
Changes in Supply
The Market at Work
Changing Markets
Summary of Market Actions
The Market's Verdict
Real World Economics: Apartment House Rents
Summary
Discussion Questions
Test Yourself
Chapter 20 Markets at Work
Real World Economics: Falling Calculator Prices
Real World Economics: Coffee and Tea
Real World Economics: Cut-Rate Air Fares
Real World Economics: Cigarette Taxes
Real World Economics: Rent Controls
Real World Economics: Price Floors
Appendix: More about Elasticity
Summary
Discussion Questions
Test Yourself
Part 6 Consumer and Producer Choice
Chapter 21 Consumer Choice
How Much To Buy?
Consumer Benefits: Utility
Maximizing Utility
Opportunity Cost
Consumer Equilibrium
Changing Consumer Choice
Changing Prices: Demand Curves
Substitutes, Complements, and Income Effects
Changing Preferences
Real World Economics: Cas Lines Grow Longer in Nation's Capital
Appendix: Indifference Curve Analysis
Summary
Discussion Questions
Test Yourself
Chapter 22 Production and Cost
Who are the Producers?
Motives of the Firm
Production and Costs
Different Views of Production Costs
Costs in the Long Run
Real World Economics: Toys and Games
Appendix: Production Theory
Summary
Discussion Questions
Test Yourself
Chapter 23 Producer Choice: Monopoly
What Is a Monopoly?
Monopoly Revenues
The Monopoly Production Decision
Monopoly Pricing
Changing Costs
Technological Advances
Monopoly in the Real World
Real World Economics: A Money-Losing Monopoly
Summary
Discussion Questions
Test Yourself
Chapter 24 Producers in competitive Markets
Perfect Competition
Price Takers
Maximizing Profits
Supply Curves
Equilibrium for the Industry
Changing Costs for the Firm
Supply in the Long Run
Real World Economics: A Monopoly versus a Competitive Market
Summary
Discussion Questions
Test Yourself
Chapter 25 Imperfect Competition
Product Differentiation
Price Discrimination
Benefits of Price Discrimination
Cartels
Oligopolies
Government Regulation
Real World Economics: Automotive Oligopoly
Summary
Discussion Questions
Test Yourself
Part 7 Resource Markets
Chapter 26 Labor Markets
The Supply of Labor
The Demand for Labor
Changes in Labor Demand
The Labor Demand Curve
Wage Rate Differentials
Labor Unions
Government Labor Policies
Real World Economics: Cost-of-Living Clauses
Summary
Discussion Questions
Test Yourself
Chapter 27 Capital and Natural
Resource Markets
The Demand for Inputs
Investment: The Demand for Capital
Input Supplies: Natural Resources
The Impact of Price Expectations
The Problem of Property Rights
Unstable Prices
Real World Economics: Training and Education Programs
Summary
Discussion Questions
Test Yourself
Chapter 28 Energy Markets
Energy and Economic Development
Price, Quantity, and Substitution Effects
Energy Supplies
Energy Price Controls
OPEC and the Supply of Oil
Managing the Energy Problem
The Paradox of Net Energy
Energy and the Environment
Real World Economics: The Price of Energy
Summary
Discussion Questions
Test Yourself
Part 8 Market Failures
Chapter 29 Free Market Choice
The Free Market Economy
The Invisible Hand
Bureaucratic Choice
Self-Interest and the Invisible Hand
The Economic Properties of Demand
Total Benefits and Consumers' Surplus
The Economic Properties of Supply
Market Equilibrium: Net Benefits
Taxes and Net Benefits
Government Subsidies
Democratic Choice
Voting: What Does the Public Want?
The Role of Government: Market Failures
Real World Economics: Ticket Scalping
Summary
Discussion Questions
Test Yourself
Chapter 30 Market Failures: Externalities
Private versus Social Costs and Benefits
External Benefits
External Costs
Optimal Pollution
Externality Policy Options
Limits to Government Actions
Public Goods
Real World Economics: Free Market or Democratic Choice
Summary
Discussion Questions
Test Yourself
Chapter 31 Market Failures: Monopolies
Monopoly Problems
Government Monopoly Policy
Antitrust Regulation
Trade-Off: Patent Monopolies
Costs and Benefits of Monopoly Regulation
Natural Monopolies
Pricing of Natural Monopolies
Real World Economics: U.S. Postal Service
Summary
Discussion Questions
Test Yourself
Chapter 32 Scarcity and Choice: The Poverty Problem
Fighting Poverty: The Record
Who Are the Poor?
Causes of Poverty
Transfer Payments
What Kind of Transfers?
Minimum Wages
Job Training and Education
Public Employment Programs
Costs of Government Action
Real World Economics: The Social Security Tax
Summary
Discussion Questions
Test Yourself
Suggestions for Further Reading
Glossary
Answers to "Test Yourself"
Index
Product details
- No. of pages: 790
- Language: English
- Copyright: © Academic Press 1981
- Published: January 1, 1981
- Imprint: Academic Press
- eBook ISBN: 9781483263007