Principles of Economics, 10e 10th Edition by N. Gregory Mankiw 035772271X 9780357722718

Principles of Economics, 10e 10th Edition N. Gregory Mankiw – Ebook Instant Download/Delivery ISBN(s): 9780357722718,035772271X

Product details:

• ISBN 10:  035772271X 
• ISBN 13: 9780357722718
• Author:N. Gregory Mankiw

Gain a strong foundation in economics with today’s most popular economics text, trusted by students like you worldwide — Mankiw’s PRINCIPLES OF ECONOMICS, 10E. Using a clear, inviting writing style, this edition focuses exclusively on content to help you better understand the world and economy in which you live. You become a more astute participant in today’s economic environment as you learn the potential and limits of economic policy. The latest examples and learning features clarify and bring economic principles to life as author Gregory Mankiw puts himself in the position of someone seeing economics for the first time. Dr. Mankiw’s goal is to emphasize the material you will find most relevant and interesting as you study economics. MindTap digital resources, Aplia digital homework solution and author videos are also available to help you further master key economic principles.

Table contents:

Part I. Introduction
Chapter 1. Ten Principles of Economics
1-1. How People Make Decisions
1-1a. Principle 1: People Face Trade-Offs
1-1b. Principle 2: The Cost of Something Is What You Give Up to Get It
1-1c. Principle 3: Rational People Think at the Margin
1-1d. Principle 4: People Respond to Incentives
1-2. How People Interact
1-2a. Principle 5: Trade Can Make Everyone Better Off
1-2b. Principle 6: Markets Are Usually a Good Way to Organize Economic Activity
1-2c. Principle 7: Governments Can Sometimes Improve Market Outcomes
1-3. How the Economy as a Whole Works
1-3a. Principle 8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services
1-3b. Principle 9: Prices Rise When the Government Prints Too Much Money
1-3c. Principle 10: Society Faces a Short-Run Trade-Off between Inflation and Unemployment
1-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 2. Thinking Like an Economist
2-1. The Economist as Scientist
2-1a. The Scientific Method: Observation, Theory, and More Observation
2-1b. The Role of Assumptions
2-1c. Economic Models
2-1d. Our First Model: The Circular-Flow Diagram
2-1e. Our Second Model: The Production Possibilities Frontier
2-1f. Microeconomics and Macroeconomics
2-2. The Economist as Policy Adviser
In the News: Why Tech Companies Hire Economists
2-2a. Positive versus Normative Analysis
2-2b. Economists in Washington
2-2c. Why Economists’ Advice Is Often Not Followed
2-3. Why Economists Disagree
2-3a. Differences in Scientific Judgments
2-3b. Differences in Values
2-3c. Perception versus Reality
2-4. Let’s Get Going
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Appendix. Graphing: A Brief Review
Chapter 3. Interdependence and the Gains from Trade
3-1. A Parable for the Modern Economy
3-1a. Production Possibilities
3-1b. Specialization and Trade
3-2. Comparative Advantage: The Driving Force of Specialization
3-2a. Absolute Advantage
3-2b. Opportunity Cost and Comparative Advantage
3-2c. Comparative Advantage and Trade
3-2d. The Price of the Trade
3-3. Applications of Comparative Advantage
3-3a. Should Naomi Osaka Mow Her Own Lawn?
3-3b. Should the United States Trade with Other Countries?
3-4. Conclusion
In The News: Economics within a Marriage
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part II. How Markets Work
Chapter 4. The Market Forces of Supply and Demand
4-1. Markets and Competition
4-1a. What Is a Market?
4-1b. What Is Competition?
4-2. Demand
4-2a. The Demand Curve: The Relationship between Price and Quantity Demanded
4-2b. Market Demand versus Individual Demand
4-2c. Shifts in the Demand Curve
4-3. Supply
4-3a. The Supply Curve: The Relationship between Price and Quantity Supplied
4-3b. Market Supply versus Individual Supply
4-3c. Shifts in the Supply Curve
4-4. Supply and Demand Together
4-4a. Equilibrium
4-4b. Three Steps to Analyzing Changes in Equilibrium
In The News: Price Increases after Disasters
4-5. Conclusion: How Prices Allocate Resources
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 5. Elasticity and Its Application
5-1. The Elasticity of Demand
5-1a. The Price Elasticity of Demand and Its Determinants
5-1b. The Price Elasticity of Demand, with Numbers
5-1c. The Midpoint Method: A Better Way to Calculate Percentage Changes and Elasticities
5-1d. The Variety of Demand Curves
5-1e. Total Revenue and the Price Elasticity of Demand
5-1f. Elasticity and Total Revenue along a Linear Demand Curve
5-1g. Other Demand Elasticities
5-2. The Elasticity of Supply
5-2a. The Price Elasticity of Supply and Its Determinants
5-2b. The Price Elasticity of Supply, with Numbers
5-2c. The Variety of Supply Curves
5-3. Three Applications of Supply, Demand, and Elasticity
5-3a. Can Good News for Farming Be Bad News for Farmers?
5-3b. Why Has OPEC Failed to Keep the Price of Oil High?
5-3c. Does Drug Interdiction Increase or Decrease Drug-Related Crime?
In The News: Elasticity of Supply and Demand in the Ride-share Market
5-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 6. Supply, Demand, and Government Policies
6-1. The Surprising Effects of Price Controls
6-1a. How Price Ceilings Affect Market Outcomes
6-1b. How Price Floors Affect Market Outcomes
6-1c. Evaluating Price Controls
6-2. The Surprising Study of Tax Incidence
6-2a. How Taxes on Sellers Affect Market Outcomes
6-2b. How Taxes on Buyers Affect Market Outcomes
6-2c. Elasticity and Tax Incidence
In The News: Should the Minimum Wage Be $15 an Hour?
6-3. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part III. Markets and Welfare
Chapter 7. Consumers, Producers, and the Efficiency of Markets
7-1. Consumer Surplus
7-1a. Willingness to Pay
7-1b. Using the Demand Curve to Measure Consumer Surplus
7-1c. How a Lower Price Raises Consumer Surplus
7-1d. What Does Consumer Surplus Measure?
7-2. Producer Surplus
7-2a. Cost and the Willingness to Sell
7-2b. Using the Supply Curve to Measure Producer Surplus
7-2c. How a Higher Price Raises Producer Surplus
7-3. Market Efficiency
7-3a. Benevolent Social Planners
7-3b. Evaluating the Market Equilibrium
7-4. Conclusion: Market Efficiency and Market Failure
In The News: How Ticket Resellers Help Allocate Scarce Resources
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 8. Application: The Costs of Taxation
8-1. The Deadweight Loss of Taxation
8-1a. How a Tax Affects Market Participants
8-1b. Deadweight Losses and the Gains from Trade
8-2. The Determinants of the Deadweight Loss
The Deadweight Loss Debate Case Study:
8-3. Deadweight Loss and Tax Revenue as Taxes Vary
The Laffer Curve and Supply-Side Economics Case Study:
8-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 9. Application: International Trade
9-1. The Determinants of Trade
9-1a. The Equilibrium without Trade
9-1b. The World Price and Comparative Advantage
9-2. The Winners and Losers from Trade
9-2a. The Gains and Losses of an Exporting Country
9-2b. The Gains and Losses of an Importing Country
9-2c. The Effects of a Tariff
9-2d. The Lessons for Trade Policy
9-2e. Other Benefits of International Trade
9-3. The Arguments for Restricting Trade
9-3a. The Jobs Argument
9-3b. The National-Security Argument
9-3c. The Infant-Industry Argument
9-3d. The Unfair-Competition Argument
9-3e. The Protection-as-a-Bargaining-Chip Argument
In The News: Trade as a Tool for Economic Development
9-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part IV. The Economics of the Public Sector
Chapter 10. Externalities
10-1. Externalities and Market Inefficiency
10-1a. Welfare Economics: A Recap
10-1b. Negative Externalities
10-1c. Positive Externalities
10-2. Public Policies toward Externalities
10-2a. Command-and-Control Policies: Regulation
10-2b. Market-Based Policy 1: Corrective Taxes and Subsidies
10-2c. Market-Based Policy 2: Tradable Pollution Permits
10-2d. Objections to the Economic Analysis of Pollution
10-3. Private Solutions to Externalities
10-3a. The Types of Private Solutions
10-3b. The Coase Theorem
10-3c. Why Private Solutions Do Not Always Work
In The News: The Coase Theorem in Action
10-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 11. Public Goods and Common Resources
11-1. The Different Kinds of Goods
11-2. Public Goods
11-2a. The Free-Rider Problem
11-2b. Some Important Public Goods
11-2c. The Difficult Job of Cost–Benefit Analysis
11-3. Common Resources
11-3a. The Tragedy of the Commons
11-3b. Some Important Common Resources
In The News: Road Pricing
11-4. Conclusion: Property Rights and Government Action
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 12. The Economics of Healthcare
12-1. The Special Characteristics of the Market for Healthcare
12-1a. Externalities Galore
12-1b. The Difficulty of Monitoring Quality
12-1c. The Insurance Market and Its Imperfections
12-1d. Healthcare as a Right
12-1e. The Rules Governing the Healthcare Marketplace
12-2. Key Facts about the U.S. Healthcare System
12-2a. People Are Living Longer
12-2b. Healthcare Spending Is a Growing Share of the Economy
12-2c. Healthcare Spending Is Especially High in the United States
12-2d. Out-of-Pocket Spending Is a Declining Share of Health Expenditure
12-3. Conclusion: The Policy Debate over Healthcare
In The News: Lessons from the Pandemic of 2020
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 13. The Design of the Tax System
13-1. U.S. Taxation: The Big Picture
13-1a. Taxes Collected by the Federal Government
13-1b. Taxes Collected by State and Local Governments
13-2. Taxes and Efficiency
13-2a. Deadweight Losses
13-2b. Administrative Burden
13-2c. Marginal Tax Rates versus Average Tax Rates
13-2d. Lump-Sum Taxes
13-3. Taxes and Equity
13-3a. The Benefits Principle
13-3b. The Ability-to-Pay Principle
13-3c. Tax Incidence and Tax Equity
13-4. Conclusion: The Trade-Off between Equity and Efficiency
In The News: The Value-Added Tax
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part V. Firm Behavior and the Organization of Industry
Chapter 14. The Costs of Production
14-1. What Are Costs?
14-1a. Total Revenue, Total Cost, and Profit
14-1b. Why Opportunity Costs Matter
14-1c. The Cost of Capital Is an Opportunity Cost
14-1d. Economists and Accountants Measure Profit Differently
14-2. Production and Costs
14-2a. The Production Function
14-2b. From the Production Function to the Total-Cost Curve
14-3. The Many Measures of Cost
14-3a. Fixed and Variable Costs
14-3b. Average and Marginal Cost
14-3c. Cost Curves and Their Shapes
14-3d. Typical Cost Curves
14-4. Costs in the Short Run and in the Long Run
14-4a. The Relationship between Short-Run and Long-Run Average Total Cost
14-4b. Economies and Diseconomies of Scale
14-5. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 15. Firms in Competitive Markets
15-1. What Is a Competitive Market?
15-1a. The Meaning of Competition
15-1b. The Revenue of a Competitive Firm
15-2. Profit Maximization and the Competitive Firm’s Supply Curve
15-2a. A Simple Example of Profit Maximization
15-2b. The Marginal-Cost Curve and the Firm’s Supply Decision
15-2c. The Firm’s Short-Run Decision to Shut Down
15-2d. Spilt Milk and Other Sunk Costs
15-2e. The Firm’s Long-Run Decision to Exit or Enter a Market
15-2f. Measuring Profit in Our Graph for the Competitive Firm
15-2g. A Brief Recap
15-3. The Supply Curve in a Competitive Market
15-3a. The Short Run: Market Supply with a Fixed Number of Firms
15-3b. The Long Run: Market Supply with Entry and Exit
15-3c. Why Do Competitive Firms Stay in Business If They Make Zero Profit?
15-3d. A Shift in Demand in the Short Run and Long Run
15-3e. Why the Long-Run Supply Curve Might Slope Upward
15-4. Conclusion: Behind the Supply Curve
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 16. Monopoly
16-1. Why Monopolies Arise
16-1a. Monopoly Resources
16-1b. Government-Created Monopolies
16-1c. Natural Monopolies
16-2. How Monopolies Make Production and Pricing Decisions
16-2a. Monopoly versus Competition
16-2b. A Monopoly’s Revenue
16-2c. Profit Maximization
16-2d. A Monopoly’s Profit
16-3. The Welfare Cost of Monopolies
16-3a. The Deadweight Loss
16-3b. The Monopoly’s Profit: A Social Cost?
16-4. Price Discrimination
16-4a. A Parable about Pricing
16-4b. The Moral of the Story
16-4c. The Analytics of Price Discrimination
16-4d. Examples of Price Discrimination
16-5. Public Policy toward Monopolies
16-5a. Increasing Competition with Antitrust Laws
16-5b. Regulation
16-5c. Public Ownership
16-5d. Above All, Do No Harm
In The News: Will the Biden Administration Expand the Scope of Antitrust Policy?
16-6. Conclusion: The Prevalence of Monopolies
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 17. Monopolistic Competition
17-1. Between Monopoly and Perfect Competition
17-2. Competition with Differentiated Products
17-2a. The Monopolistically Competitive Firm in the Short Run
17-2b. The Long-Run Equilibrium
17-2c. Monopolistic versus Perfect Competition
17-2d. Monopolistic Competition and the Welfare of Society
17-3. Advertising
17-3a. The Debate over Advertising
17-3b. Advertising as a Signal of Quality
17-3c. Brand Names
17-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 18. Oligopoly
18-1. Markets with Only a Few Sellers
18-1a. A Duopoly Example
18-1b. Competition, Monopolies, and Cartels
18-1c. The Equilibrium for an Oligopoly
18-1d. How the Size of an Oligopoly Affects the Market Outcome
18-2. The Economics of Cooperation
18-2a. The Prisoners’ Dilemma
18-2b. Oligopolies as a Prisoners’ Dilemma
18-2c. Other Examples of the Prisoners’ Dilemma
18-2d. The Prisoners’ Dilemma and the Welfare of Society
18-2e. Why People Sometimes Cooperate
18-3. Public Policy toward Oligopolies
18-3a. Restraint of Trade and the Antitrust Laws
18-3b. Controversies over Antitrust Policy
In The News: Amazon in the Crosshairs
18-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part VI. The Economics of Labor Markets
Chapter 19. The Markets for the Factors of Production
19-1. The Demand for Labor
19-1a. The Competitive, Profit-Maximizing Firm
19-1b. The Production Function and the Marginal Product of Labor
19-1c. The Value of the Marginal Product and the Demand for Labor
19-1d. What Causes the Labor-Demand Curve to Shift?
19-2. The Supply of Labor
19-2a. The Trade-Off between Work and Leisure
19-2b. What Causes the Labor-Supply Curve to Shift?
19-3. Equilibrium in the Labor Market
19-3a. Shifts in Labor Supply
19-3b. Shifts in Labor Demand
19-4. The Other Factors of Production: Land and Capital
19-4a. Equilibrium in the Markets for Land and Capital
19-4b. Linkages among the Factors of Production
19-5. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 20. Earnings and Discrimination
20-1. What Determines Wages?
20-1a. Compensating Differentials
20-1b. Human Capital
20-1c. Ability, Effort, and Chance
20-1d. An Alternative View of Education: Signaling
20-1e. The Superstar Phenomenon
20-1f. Below-Equilibrium Wages: Monopsony
20-1g. Above-Equilibrium Wages: Minimum-Wage Laws, Unions, and Efficiency Wages
In The News: The Aftereffects of the Covid Pandemic
20-2. The Economics of Discrimination
20-2a. Measuring Labor-Market Discrimination
20-2b. Discrimination by Employers
20-2c. Discrimination by Customers and Governments
20-2d. Statistical Discrimination
20-3. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 21. Income Inequality and Poverty
21-1. Measuring Inequality
21-1a. U.S. Income Inequality
21-1b. Inequality around the World
21-1c. The Poverty Rate
21-1d. Problems in Measuring Inequality
21-1e. Economic Mobility
21-2. The Political Philosophy of Redistributing Income
21-2a. The Utilitarian Tradition
21-2b. The Liberal Contractarian Tradition
21-2c. The Libertarian Tradition
21-3. Policies to Reduce Poverty
21-3a. Minimum-Wage Laws
21-3b. Welfare
21-3c. Negative Income Tax
21-3d. In-Kind Transfers
21-3e. Antipoverty Programs and Work Incentives
In The News: Poverty during the Pandemic
21-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part VII. Topics for Further Study
Chapter 22. The Theory of Consumer Choice
22-1. The Budget Constraint: What a Consumer Can Afford
22-1a. Representing Consumption Opportunities in a Graph
22-1b. Shifts in the Budget Constraint
22-2. Preferences: What a Consumer Wants
22-2a. Representing Preferences with Indifference Curves
22-2b. Four Properties of Indifference Curves
22-2c. Two Extreme Examples of Indifference Curves
22-3. Optimization: What a Consumer Chooses
22-3a. The Consumer’s Optimal Choices
22-3b. How Changes in Income Affect the Consumer’s Choices
22-3c. How Changes in Prices Affect the Consumer’s Choices
22-3d. Income and Substitution Effects
22-3e. Deriving the Demand Curve
22-4. Three Applications
22-4a. Do All Demand Curves Slope Downward?
22-4b. How Do Wages Affect Labor Supply?
22-4c. How Do Interest Rates Affect Household Saving?
22-5. Conclusion: Do People Really Think This Way?
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 23. Frontiers of Microeconomics
23-1. Asymmetric Information
23-1a. Hidden Actions: Principals, Agents, and Moral Hazard
23-1b. Hidden Characteristics: Adverse Selection and the Lemons Problem
23-1c. Signaling to Convey Private Information
23-1d. Screening to Uncover Private Information
23-1e. Asymmetric Information and Public Policy
23-2. Political Economy
23-2a. The Condorcet Voting Paradox
23-2b. Arrow’s Impossibility Theorem
23-2c. The Median Voter Is King
23-2d. Politicians Are People Too
23-3. Behavioral Economics
23-3a. People Aren’t Always Rational
23-3b. People Care about Fairness
23-3c. People Are Inconsistent over Time
In The News: Faults in Risk Assessment
23-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part VIII. The Data of Macroeconomics
Chapter 24. Measuring a Nation’s Income
24-1. The Economy’s Income and Expenditure
24-2. The Measurement of GDP
24-2a. “GDP Is the Market Value …”
24-2b. “… of All …”
24-2c. “… Final …”
24-2d. “… Goods and Services …”
24-2e. “… Produced …”
24-2f. “… Within a Country …”
24-2g. “… In a Given Period.”
24-3. The Components of GDP
24-3a. Consumption
24-3b. Investment
24-3c. Government Purchases
24-3d. Net Exports
24-4. Real versus Nominal GDP
24-4a. A Numerical Example
24-4b. The GDP Deflator
24-5. Is GDP a Good Measure of Economic Well-Being?
International Differences in GDP and the Quality of Life Case Study:
In The News: Sex, Drugs, and GDP
24-6. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 25. Measuring the Cost of Living
25-1. The Consumer Price Index
25-1a. How the CPI Is Calculated
25-1b. Problems in Measuring the Cost of Living
25-1c. The GDP Deflator versus the Consumer Price Index
25-2. Correcting Economic Variables for the Effects of Inflation
25-2a. Dollar Figures from Different Times
25-2b. Indexation
25-2c. Real and Nominal Interest Rates
25-3. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part IX. The Real Economy in the Long Run
Chapter 26. Production and Growth
26-1. Economic Growth around the World
26-2. Productivity: Its Role and Determinants
26-2a. Why Productivity Is So Important
26-2b. How Productivity Is Determined
26-3. Economic Growth and Public Policy
26-3a. Saving and Investment
26-3b. Diminishing Returns and the Catch-Up Effect
26-3c. Investment from Abroad
26-3d. Education
26-3e. Health and Nutrition
26-3f. Property Rights and Political Stability
26-3g. Free Trade
26-3h. Research and Development
26-3i. Population Growth
In the News: The Secret Sauce of American Prosperity
26-4. Conclusion: The Importance of Long-Run Growth
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 27. Saving, Investment, and the Financial System
27-1. Financial Institutions in the U.S. Economy
27-1a. Financial Markets
27-1b. Financial Intermediaries
27-1c. Summing Up
27-2. Saving and Investment in the National Income Accounts
27-2a. Some Important Identities
27-2b. The Meaning of Saving and Investment
27-3. The Market for Loanable Funds
27-3a. Supply and Demand for Loanable Funds
27-3b. Policy 1: Saving Incentives
27-3c. Policy 2: Investment Incentives
27-3d. Policy 3: Government Budget Deficits and Surpluses
27-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 28. The Basic Tools of Finance
28-1. Present Value: Measuring the Time Value of Money
28-2. Managing Risk
28-2A. Risk Aversion
28-2b. The Markets for Insurance
28-2c. Diversification of Firm-Specific Risk
28-2d. The Trade-Off between Risk and Return
28-3. Asset Valuation
28-3a. Fundamental Analysis
28-3b. The Efficient Markets Hypothesis
28-3c. Market Irrationality
In The News: The Perils of Investing with a Y Chromosome
28-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 29. Unemployment
29-1. Identifying Unemployment
29-1a. How Is Unemployment Measured?
29-1b. Does the Unemployment Rate Measure What We Want It to Measure?
29-1c. How Long Are the Unemployed without Work?
29-1d. Why Are There Always Some People Unemployed?
29-2. Job Search
29-2a. Why Some Frictional Unemployment Is Inevitable
29-2b. Public Policy and Job Search
29-2c. Unemployment Insurance
29-3. Minimum-Wage Laws
Who Earns the Federal Minimum Wage? Case Study:
29-4. Unions and Collective Bargaining
29-4a. The Economics of Unions
29-4b. Are Unions Good or Bad for the Economy?
29-5. The Theory of Efficiency Wages
29-5a. Worker Health
29-5b. Worker Turnover
29-5c. Worker Quality
29-5d. Worker Effort
29-5e. Worker Morale
In The News: Efficiency Wages in Practice
29-6. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part X. Money and Prices in the Long Run
Chapter 30. The Monetary System
30-1. The Meaning of Money
30-1a. The Functions of Money
30-1b. The Kinds of Money
30-1c. Money in the U.S. Economy
30-2. The Federal Reserve System
30-2a. The Fed’s Organization
30-2b. The Federal Open Market Committee
30-3. Banks and the Money Supply
30-3a. The Simple Case of 100-Percent-Reserve Banking
30-3b. Money Creation with Fractional-Reserve Banking
30-3c. The Money Multiplier
30-3d. Bank Capital, Leverage, and the Financial Crisis of 2008–2009
30-4. The Fed’s Tools of Monetary Control
30-4a. How the Fed Influences the Quantity of Reserves
30-4b. How the Fed Influences the Reserve Ratio
30-4c. Problems in Controlling the Money Supply
30-4d. The Federal Funds Rate
In The News: A Trip to Jekyll Island
30-5. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 31. Money Growth and Inflation
31-1. The Classical Theory of Inflation
31-1a. The Level of Prices and the Value of Money
31-1b. Money Supply, Money Demand, and Monetary Equilibrium
31-1c. The Effects of a Monetary Injection
31-1d. A Brief Look at the Adjustment Process
31-1e. The Classical Dichotomy and Monetary Neutrality
31-1f. Velocity and the Quantity Equation
31-1g. The Inflation Tax
31-1h. The Fisher Effect
31-2. The Costs of Inflation
31-2a. A Fall in Purchasing Power? The Inflation Fallacy
31-2b. Shoeleather Costs
31-2c. Menu Costs
31-2d. Relative-Price Variability and the Misallocation of Resources
31-2e. Inflation-Induced Tax Distortions
31-2f. Confusion and Inconvenience
31-2g. A Special Cost of Unexpected Inflation: Arbitrary Redistributions of Wealth
31-2h. Inflation Is Bad, but Deflation May Be Worse
In The News: Life during Hyperinflation
31-3. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part XI. The Macroeconomics of Open Economies
Chapter 32. Open-Economy Macroeconomics: Basic Concepts
32-1. The International Flows of Goods and Capital
32-1a. The Flow of Goods: Exports, Imports, and Net Exports
32-1b. The Flow of Financial Resources: Net Capital Outflow
32-1c. The Equality of Net Exports and Net Capital Outflow
32-1d. Saving, Investment, and Their Relationship to International Flows
32-1e. Summing Up
32-2. The Prices for International Transactions: Real and Nominal Exchange Rates
32-2a. Nominal Exchange Rates
32-2b. Real Exchange Rates
32-3. A First Theory of Exchange-Rate Determination: Purchasing-Power Parity
32-3a. The Basic Logic of Purchasing-Power Parity
32-3b. Implications of Purchasing-Power Parity
32-3c. Limitations of Purchasing-Power Parity
32-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 33. A Macroeconomic Theory of the Open Economy
33-1. Supply and Demand for Loanable Funds and for Foreign-Currency Exchange
33-1a. The Market for Loanable Funds
33-1b. The Market for Foreign-Currency Exchange
33-2. Equilibrium in the Open Economy
33-2a. Net Capital Outflow: The Link between the Two Markets
33-2b. Simultaneous Equilibrium in Two Markets
33-3. How Policies and Events Affect an Open Economy
33-3a. Government Budget Deficits
33-3b. Trade Policy
33-3c. Political Instability and Capital Flight
In the News: Separating Fact from Fiction
33-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part XII. Short-Run Economic Fluctuations
Chapter 34. Aggregate Demand and Aggregate Supply
34-1. Three Key Facts about Economic Fluctuations
34-1a. Fact 1: Economic Fluctuations Are Irregular and Unpredictable
34-1b. Fact 2: Most Macroeconomic Quantities Fluctuate Together
34-1c. Fact 3: As Output Falls, Unemployment Rises
34-2. Explaining Short-Run Economic Fluctuations
34-2a. The Assumptions of Classical Economics
34-2b. The Reality of Short-Run Fluctuations
34-2c. The Model of Aggregate Demand and Aggregate Supply
34-3. The Aggregate-Demand Curve
34-3a. Why the Aggregate-Demand Curve Slopes Downward
34-3b. Why the Aggregate-Demand Curve Might Shift
34-4. The Aggregate-Supply Curve
34-4a. Why the Aggregate-Supply Curve Is Vertical in the Long Run
34-4b. Why the Long-Run Aggregate-Supply Curve Might Shift
34-4c. Using Aggregate Demand and Aggregate Supply to Depict Long-Run Growth and Inflation
34-4d. Why the Aggregate-Supply Curve Slopes Upward in the Short Run
34-4e. Why the Short-Run Aggregate-Supply Curve Might Shift
34-5. Two Causes of Economic Fluctuations
34-5a. The Effects of a Shift in Aggregate Demand
34-5b. The Effects of a Shift in Aggregate Supply
In the News: The Strange Downturn of 2020
34-6. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 35. The Influence of Monetary and Fiscal Policy on Aggregate Demand
35-1. How Monetary Policy Influences Aggregate Demand
35-1a. The Theory of Liquidity Preference
35-1b. The Downward Slope of the Aggregate-Demand Curve
35-1c. Changes in the Money Supply
35-1d. The Role of Interest-Rate Targets in Fed Policy
35-1e. The Zero Lower Bound
35-2. How Fiscal Policy Influences Aggregate Demand
35-2a. Changes in Government Purchases
35-2b. The Multiplier Effect
35-2c. A Formula for the Spending Multiplier
35-2d. Other Applications of the Multiplier Effect
35-2e. The Crowding-Out Effect
35-2f. Changes in Taxes
35-3. Using Policy to Stabilize the Economy
35-3a. The Case for Active Stabilization Policy
35-3b. The Case against Active Stabilization Policy
35-3c. Automatic Stabilizers
35-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Chapter 36. The Short-Run Trade-Off between Inflation and Unemployment
36-1. The Phillips Curve
36-1a. Origins of the Phillips Curve
36-1b. Aggregate Demand, Aggregate Supply, and the Phillips Curve
36-2. Shifts in the Phillips Curve: The Role of Expectations
36-2a. The Long-Run Phillips Curve
36-2b. The Meaning of “Natural”
36-2c. Reconciling Theory and Evidence
36-2d. The Short-Run Phillips Curve
36-2e. The Natural Experiment for the Natural-Rate Hypothesis
36-3. Shifts in the Phillips Curve: The Role of Supply Shocks
36-4. The Cost of Reducing Inflation
36-4a. The Sacrifice Ratio
36-4b. Rational Expectations and the Possibility of Costless Disinflation
36-4c. The Volcker Disinflation
36-5. Recent History
36-5a. The Greenspan Era
36-5b. The Great Recession
36-5c. The Pandemic
36-6. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
Part XIII. Final Thoughts
Chapter 37. Six Debates over Macroeconomic Policy
37-1. How Actively Should Policymakers Try to Stabilize the Economy?
37-1a. The Case for Robust Stabilization Policy
37-1b. The Case for Modest Stabilization Policy
37-2. Should the Government Fight Recessions with Spending Hikes or Tax Cuts?
37-2a. The Case for Fighting Recessions with Spending Hikes
37-2b. The Case for Fighting Recessions with Tax Cuts
37-3. Should Monetary Policy Be Made by Rule or Discretion?
37-3a. The Case for Rule-based Monetary Policy
37-3b. The Case for Discretionary Monetary Policy
37-4. Should the Central Bank Aim for an Inflation Rate Near Zero?
37-4a. The Case for Near-Zero Inflation
37-4b. The Case for Living with Moderate Inflation
In the News: The Goals of Monetary Policy
37-5. Should the Government Balance Its Budget?
37-5a. The Case for a Balanced Budget
37-5b. The Case against a Balanced Budget
37-6. Should the Tax Laws Be Reformed to Encourage Saving?
37-6a. The Case for Promoting Saving through Tax Reform
37-6b. The Case against Promoting Saving through Tax Reform
37-7. Conclusion: Economic Policy and Shades of Gray
Chapter in a Nutshell
Questions for Review
Problems and Applications
Chapter 38. Appendix: How Economists Use Data
38-1. The Data That Economists Gather and Study
38-1a. Experimental Data
38-1b. Observational Data
38-1c. Three Types of Data
38-2. What Economists Do with Data
38-2a. Describing the Economy
38-2b. Quantifying Relationships
38-2c. Testing Hypotheses
38-2d. Predicting the Future
38-3. The Methods of Data Analysis
38-3a. Finding the Best Estimate
38-3b. Gauging Uncertainty
38-3c. Accounting for Confounding Variables
38-3d. Establishing Causal Effects
38-4. Conclusion
Chapter in a Nutshell
Key Concepts
Questions for Review
Problems and Applications
The Keynesian Cross
1. The Big Idea
2. The Basic Model
2a. The Determinants of Planned Expenditure
2b. The Equilibrium
2c. The Adjustment to Equilibrium
3. Applying the Model
3a. How to Shrink a Recessionary Gap
3b. The Paradox of Thrift
4. Conclusion: Back to the Aggregate-Demand Curve
Chapter in a Nutshell

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