Introductory Economics

PrefacePart 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 QuestionsPart 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 QuestionsPart 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 QuestionsPart 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 QuestionsPart 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 YourselfPart 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 YourselfPart 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 YourselfPart 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 YourselfSuggestions for Further ReadingGlossaryAnswers to "Test Yourself"Index