Principles of Macroeconomics

Preface
	1. About OpenStax
	2. About OpenStax resources
	3. About Principles of Macroeconomics 2e
	4. Additional resources
	5. About the authors
Chapter 1. Welcome to Economics!
	1.1. What Is Economics, and Why Is It Important?*
	1.2. Microeconomics and Macroeconomics*
	1.3. How Economists Use Theories and Models to Understand Economic Issues*
	1.4. How To Organize Economies: An Overview of Economic Systems*
	Glossary
Chapter 2. Choice in a World of Scarcity
	2.1. How Individuals Make Choices Based on Their Budget Constraint*
	2.2. The Production Possibilities Frontier and Social Choices*
	2.3. Confronting Objections to the Economic Approach*
	Glossary
Chapter 3. Demand and Supply
	3.1. Demand, Supply, and Equilibrium in Markets for Goods and Services*
	3.2. Shifts in Demand and Supply for Goods and Services*
	3.3. Changes in Equilibrium Price and Quantity: The Four-Step Process*
	3.4. Price Ceilings and Price Floors*
	3.5. Demand, Supply, and Efficiency*
	Glossary
Chapter 4. Labor and Financial Markets
	4.1. Demand and Supply at Work in Labor Markets*
	4.2. Demand and Supply in Financial Markets*
	4.3. The Market System as an Efficient Mechanism for Information*
	Glossary
Chapter 5. Elasticity
	5.1. Price Elasticity of Demand and Price Elasticity of Supply*
	5.2. Polar Cases of Elasticity and Constant Elasticity*
	5.3. Elasticity and Pricing*
	5.4. Elasticity in Areas Other Than Price*
	Glossary
Chapter 6. The Macroeconomic Perspective
	6.1. Measuring the Size of the Economy: Gross Domestic Product*
	6.2. Adjusting Nominal Values to Real Values*
	6.3. Tracking Real GDP over Time*
	6.4. Comparing GDP among Countries*
	6.5. How Well GDP Measures the Well-Being of Society*
	Glossary
Chapter 7. Economic Growth
	7.1. The Relatively Recent Arrival of Economic Growth*
	7.2. Labor Productivity and Economic Growth*
	7.3. Components of Economic Growth*
	7.4. Economic Convergence*
	Glossary
Chapter 8. Unemployment
	8.1. How Economists Define and Compute Unemployment Rate*
	8.2. Patterns of Unemployment*
	8.3. What Causes Changes in Unemployment over the Short Run*
	8.4. What Causes Changes in Unemployment over the Long Run*
	Glossary
Chapter 9. Inflation
	9.1. Tracking Inflation*
	9.2. How to Measure Changes in the Cost of Living*
	9.3. How the U.S. and Other Countries Experience Inflation*
	9.4. The Confusion Over Inflation*
	9.5. Indexing and Its Limitations*
	Glossary
Chapter 10. The International Trade and Capital Flows
	10.1. Measuring Trade Balances*
	10.2. Trade Balances in Historical and International Context*
	10.3. Trade Balances and Flows of Financial Capital*
	10.4. The National Saving and Investment Identity*
	10.5. The Pros and Cons of Trade Deficits and Surpluses*
	10.6. The Difference between Level of Trade and the Trade Balance*
	Glossary
Chapter 11. The Aggregate Demand/Aggregate Supply Model
	11.1. Macroeconomic Perspectives on Demand and Supply*
	11.2. Building a Model of Aggregate Demand and Aggregate Supply*
	11.3. Shifts in Aggregate Supply*
	11.4. Shifts in Aggregate Demand*
	11.5. How the AD/AS Model Incorporates Growth, Unemployment, and Inflation*
	11.6. Keynes’ Law and Say’s Law in the AD/AS Model*
	Glossary
Chapter 12. The Keynesian Perspective
	12.1. Aggregate Demand in Keynesian Analysis*
	12.2. The Building Blocks of Keynesian Analysis*
	12.3. The Phillips Curve*
	12.4. The Keynesian Perspective on Market Forces*
	Glossary
Chapter 13. The Neoclassical Perspective
	13.1. The Building Blocks of Neoclassical Analysis*
	13.2. The Policy Implications of the Neoclassical Perspective*
	13.3. Balancing Keynesian and Neoclassical Models*
	Glossary
Chapter 14. Money and Banking
	14.1. Defining Money by Its Functions*
	14.2. Measuring Money: Currency, M1, and M2*
	14.3. The Role of Banks*
	14.4. How Banks Create Money*
	Glossary
Chapter 15. Monetary Policy and Bank Regulation
	15.1. The Federal Reserve Banking System and Central Banks*
	15.2. Bank Regulation*
	15.3. How a Central Bank Executes Monetary Policy*
	15.4. Monetary Policy and Economic Outcomes*
	15.5. Pitfalls for Monetary Policy*
	Glossary
Chapter 16. Exchange Rates and International Capital Flows
	16.1. How the Foreign Exchange Market Works*
	16.2. Demand and Supply Shifts in Foreign Exchange Markets*
	16.3. Macroeconomic Effects of Exchange Rates*
	16.4. Exchange Rate Policies*
	Glossary
Chapter 17. Government Budgets and Fiscal Policy
	17.1. Government Spending*
	17.2. Taxation*
	17.3. Federal Deficits and the National Debt*
	17.4. Using Fiscal Policy to Fight Recession, Unemployment, and Inflation*
	17.5. Automatic Stabilizers*
	17.6. Practical Problems with Discretionary Fiscal Policy*
	17.7. The Question of a Balanced Budget*
	Glossary
Chapter 18. The Impacts of Government Borrowing
	18.1. How Government Borrowing Affects Investment and the Trade Balance*
	18.2. Fiscal Policy and the Trade Balance*
	18.3. How Government Borrowing Affects Private Saving*
	18.4. Fiscal Policy, Investment, and Economic Growth*
	Glossary
Chapter 19. Macroeconomic Policy Around the World
	19.1. The Diversity of Countries and Economies across the World*
	19.2. Improving Countries’ Standards of Living*
	19.3. Causes of Unemployment around the World*
	19.4. Causes of Inflation in Various Countries and Regions*
	19.5. Balance of Trade Concerns*
	Glossary
Chapter 20. International Trade
	20.1. Absolute and Comparative Advantage*
	20.2. What Happens When a Country Has an Absolute Advantage in All Goods*
	20.3. Intra-industry Trade between Similar Economies*
	20.4. The Benefits of Reducing Barriers to International Trade*
	Glossary
Chapter 21. Globalization and Protectionism
	21.1. Protectionism: An Indirect Subsidy from Consumers to Producers*
	21.2. International Trade and Its Effects on Jobs, Wages, and Working Conditions*
	21.3. Arguments in Support of Restricting Imports*
	21.4. How Governments Enact Trade Policy: Globally, Regionally, and Nationally*
	21.5. The Tradeoffs of Trade Policy*
	Glossary
Appendix A. The Use of Mathematics in Principles of Economics*
	A.1. Algebraic Models
	A.2. Growth Rates
	A.3. Displaying Data Graphically and Interpreting the Graph
	A.4. Key Concepts and Summary
	A.5. Review Questions
Appendix B. The Expenditure-Output Model*
	B.1. The Axes of the Expenditure-Output Diagram
	B.2. Building the Aggregate Expenditure Schedule
	B.3. Equilibrium in the Keynesian Cross Model
	B.4. The Multiplier Effect
	B.5. Key Concepts and Summary
	B.6. Self-Check Questions
	B.7. Review Questions
	B.8. Critical Thinking Questions
	B.9. References
Solutions
	Chapter 1
	Chapter 2
	Chapter 3
	Chapter 4
	Chapter 5
	Chapter 6
	Chapter 7
	Chapter 8
	Chapter 9
	Chapter 10
	Chapter 11
	Chapter 12
	Chapter 13
	Chapter 14
	Chapter 15
	Chapter 16
	Chapter 17
	Chapter 18
	Chapter 19
	Chapter 20
	Chapter 21
References
	Index
Blank Page