Macroeconomics : principles and tools / Arthur O'Sullivan, Steven M. Sheffrin.

CONTENTS

PART 1: Introduction and Key Principles

1. Introduction: What is Economics?
What is Economics?
The Economic way of Thinking
Preview of Coming Attractions: Microeconomics
Preview of Coming Attractions: Macroeconomics

2. Key Principles of Economics
The Principle of Opportunity Cost
The Marginal Principle
The Principle of Diminishing Returns
The Spillover Principle

3. Markets in the Global Economy
Why do Markets Exist?
How do Markets Operate?
The Global Economy and Interdependence
Governments in the Market Economy

4. Supply, Demand, and Market Equilibrium
The Demand Curve
The Supply Curve
Marginal Principle
Market Equilibrium
Market Effects of Changes in Demand
Market Effects of Changes in Supply

PART 2: The Basic Concepts in Macroeconomics

5. Measuring a Nation's Production and Income
Production, Income, and the Circular Flow
Measuring Gross Domestic Product
Who Purchases GDP?
Who gets the Income?
Real vs. Nominal GDP
GDP as a Measure of Welfare

6. Unemployment and Inflation
What is Unemployment?
Economic Detectives: Suspicious Unemployment Statistics
The Consumer Price and the Cost of Living
Inflation
Looking Ahead

PART 3: The Economy in the Long Run

7. Classical Economic : The Economy at Full Employment
The Aggregate Production Function for the Economy
The Demand and Supply for Labor
Economic Detective: The Case of Asian Wages and Employment
Labor Market Equilibrium and Full Employment
Applications of the Classic Model
The Division of Output Among Competing Demand

8. Why Do Economies Grow?
The Diversity of Economic Experience
Capital Deepening
The Key Role of Technological Progress
Growth Accounting: Two Examples
Economic Detective: Explaining the Slowdown in Labor Productivity
What Causes Technological Progress?
Human Capital

PART 4: Economic Fluctuation

9. Aggregate Demand and Aggregate Supply
Business Cycles and Economic Fluctuations
Sticky Prices and Demand-Side Economics
Aggregate Demand and Aggregate Supply
Economic Detective: Did Higher Taxes Cause the Recession?
Output and Prices in the Short Run and in the Long Run
Looking Ahead

10. Keynesian Economic and Fiscal Policy
The Simplest Keynesian Cross
The Consumption Function and the Multiplier
Government Spending and Taxation
Exports and Imports
Economic Detectives: The Netherlands' Multiplier

11. Investment and Financial Intermediation
Investment: A Plunge into the Unknown
Nominal Interest Rates and Real Interest Rates
Investment Spending and Interest Rates
Economic Detective: The Case of High Interest Rates and Investment
How Financial Intermediation Facilitates Investment

PART 5: Money, Banking, and Monetary Policy

12. Money, the Banking System, and the Federal Reserve
What is Money?
Measuring Money in the U.S. Economy
Banks as Financial Intermediaries
The Process of Money Creation
The Role the Federal Reserve in the Money Creation Process
The Structure of the Federal Reserve

13. Monetary Policy in the Short Run
Model of the Money Market
Economic Detective: The Mystery of Increasing Interest Rates and Economic Recovery
Bonds Prices and Interest Rates
Interest Rates, Investment, and Output
Stabilization Policy and It's Limitations
Looking Ahead

PART 6: Inflation, Unemployment, and Economic Policy

14. From the Short Run to the Long Run
Definitions
Wage and Price Adjustments
Aggregate Demand, Aggregate Supply, and Adjustment
The Speed of Adjustment and Economic Policy
A Closer Look at the Adjustment Process
Long-Run Neutrality of Money
Crowding Out in the Long Run
Political Business Cycles

15. The Dynamics of Inflation and Unemployment
Money Growth, Inflation, and Interest Rates
Credibility and Inflation
Inflation and the Velocity of Money
Budget Deficits and Hyperinflation
The Costs of Unemployment and Inflation

16. Current Issues in Macroeconomic Policy
Should We Balance the Federal Budget?
The Debate
Should the Federal Reserve Aim for Zero Inflation
Should Tax Policy be Designed Solely for Growth

PART 7: The International Economy

17. International Trade and Public Policy
Benefits from Specialization and Trade
Protectionist Policies
Economic Detective: NAFTA and the Giant Sucking Sound
Rationales for Protectionist Policies
Recent Policy Debates and Trade Agreements

18. The World of International Finance
How Exchange Rates are Determined
Real Exchange Rates and Purchasing Power Parity
The Current Account and the Capital Account
Fixing the Exchange Rate
Fixed Versus Flexible Exchange Rate
Managing Financial Crises

Includes Glossary G1-10 and Index 1-9


M.A