Table of contents for Macroeconomics : principles, problems, and policies / Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn.

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Note: Contents data are machine generated based on pre-publication provided by the publisher. Contents may have variations from the printed book or be incomplete or contain other coding.

List of Key Graphs 00
Preface 00
Contributors 00
Introduction to Economics and the Economy 00
To the Student 00
Chapter 1
Limits, Alternatives, and Choices 00
The Economic Perpective 00
Scarcity and Choice / Purposeful Behavior / Marginal Analysis: Benefits and 
Consider This: Free for All? 00
Consider This: Fast-Food Lines 00
Theories, Principles, and Models 00
Microeconomics and Macroeconomics 00
Microeconomics / Macroeconomics / Positive and Normative Economics
Individuals? Economizing Problem 00
Limited Income / Unlimited Wants / A Budget Line / Attainable and Unattainable
Consider This: Did Gates, Winfrey, and Rodriguez Make Bad Choices? 00
Society?s Economizing Problem 00
Scarce Resources / Resource Categories
Production Possibilities Model 00
Production Possibilities Table / Production Possibilities Curve / Law of 
Opportunity Costs / Optimal Allocation
Consider This: The Economics of War 00
Unemployment, Growth, and the Future 00
A Growing Economy / Present Choices and Future Possibilities / A Qualification:
International Trade
Last Word: Pitfalls to Sound Economic Reasoning 00
Chapter 1 Appendix: Graphs and Their Meaning 00
Chapter 2
The Market System and the Circular Flow 00
Economic Systems 00
The Command System / The Market System
Characteristics of the Market System 00
Private Property / Freedom of Enterprise and Choice / Self-Interest / 
Competition /
Markets and Prices / Technology and Capital Goods / Specialization / Use of 
Five Fundamental Questions 00
What Will Be Produced? / How Will the Goods and Services Be Produced? / Who Will
Get the Output? / How Will the System Accommodate Change? / How Will the System
Promote Progress?
Consider This: McHits and McMisses 00
The ?Invisible Hand? 00
The Demise of the Command Systems 00
The Coordination Problem / The Incentive Problem
Consider This: The Two Koreas 00
The Circular Flow Model 00
Resource Market / Product Market
Last Word: Shuffling the Deck 00
Chapter 3
Demand, Supply, and Market Equilibrium 00
Markets 00
Demand 00
Law of Demand / The Demand Curve / Market Demand / Change in Demand / Changes
in Quantity Demanded
Supply 00
Law of Supply / The Supply Curve / Market Supply / Determinants of Supply / 
Changes in
Supply / Changes in Quantity Supplied
Market Equilibrium
Equilibrium Price and Quantity / Rationing Function of Prices / Efficient 
Allocation /
Changes in Supply, Demand, and Equilibrium
Consider This: Ticket Scalping: A Bum Rap! 00
Consider This: Salsa and Coffee Beans 00
Application: Government-Set Prices 00
Price Ceilings on Gasoline / Rent Controls / Price Floors on Wheat
Last Word: A Legal Market for Human Organs? 00
Chapter 3 Appendix: Additional Examples of Supply and Demand 00
Chapter 4
The U.S. Economy: Private and Public Sectors 00
Households as Income Receivers 00
The Functional Distribution of Income / The Personal Distribution of Income
Households as Spenders 00
Personal Taxes / Personal Saving / Personal Consumption Expenditures
The Business Population 00
Legal Forms of Businesses 00
Advantages of Corporations / The Principal-Agent Problem
Consider This: Unprincipled Agents 00
The Public Sector: Government?s Role 00
Providing the Legal Structure / Maintaining Competition / Redistributing Income 
Reallocating Resources / Promoting Stability / Government?s Role: A 
Consider This: Street Entertainers 00
The Circular Flow Revisited 00
Government Finance 00
Government Purchases and Transfers
Federal Finance 00
Federal Expenditures / Federal Tax Revenues
State and Local Finance 00
State Finances / Local Finances
Last Word: Financing Social Security 00
Chapter 5
The United States in the Global Economy 00
International Linkages 00
The United States and World Trade 00
Volume and Pattern / Rapid Trade Growth / Participants in International Trade
Specialization and Comparative Advantage 00
Comparative Advantage: Production Possibilities Analysis
Consider This: A CPA and House Painter 00
The Foreign Exchange Market 00
Dollar-Yen Market / Changing Rates: Depreciation and Appreciation
Government and Trade 00
Trade Impediments and Subsidies / Why Government Trade Interventions? / Costs to
Consider This: Buy American? 00
Multilateral Trade Agreements and Free-Trade Zones 00
Reciprocal Trade Agreements Act / General Agreement on Tariffs and Trade / World
Trade Organization / The European Union / North American Free Trade Agreement
Trade-Related Issues 00
Trade Adjustment Assistance / Offshoring of Jobs
Global Competition 00
Last Word: Fair-Trade Products 00
GDP, Growth, and Instability 00
Chapter 6
An Introduction to Macroeconomics 00
Performance and Policy 00
The Miracle of Modern Economic Growth 00
Savings, Investment, and Choosing between Present and Future Consumption / Banks
and Other Financial Institutions
Uncertainty, Expectations, and Shocks 00
Demand Shocks and Flexible Prices / Demand Shocks and Sticky Prices
How Sticky Are Prices? 00
Categorizing Macroeconomic Models Using Price Stickiness 00
Last Word: Will Better Inventory Management Mean Fewer Recessions? 00
Chapter 7
Measuring Domestic Output and National Income 00
Assessing the Economy?s Performance 00
Gross Domestic Product 00
A Monetary Measure / Avoiding Multiple Counting / GDP Excludes Nonproduction
Transactions / Two Ways of Looking at GDP: Spending and Income
The Expenditures Approach 00
Personal Consumption Expenditures (C) / Gross Private Domestic Investment (Ig) /
Government Purchases (G) / Net Exports (Xn) / Putting It All Together: GDP = C + 
Ig + G +
Consider This: Stock Answers about Flows 00
The Income Approach 00
Compensation of Employees / Rents / Interest / Proprietors? Income / Corporate 
/ Taxes on Production and Imports / From National Income to GDP
Other National Accounts 00
Net Domestic Product / National Income / Personal Income / Disposable Income / 
Circular Flow Revisited
Nominal GDP versus Real GDP 00
Adjustment Process in a One-Product Economy / An Alternative Method / Real-World
Considerations and Data
Shortcomings of GDP 00
Nonmarket Activities / Leisure / Improved Product Quality / The Underground 
/ GDP and the Environment / Composition and Distribution of Output / Noneconomic
Sources of Well-Being
Last Word: Magical Mystery Tour 00
Chapter 8
Economic Growth 00
Economic Growth 00
Growth as a Goal / Arithmetic of Growth / Growth in the United States
Modern Economic Growth 00
The Uneven Distribution of Growth / Catching Up Is Possible
Consider This: Economic Growth Rates Matter! 00
Institutional Structures That Promote Growth 00
Consider This: <<titl to come>> 00
Ingredients of Growth 00
Supply Factors / Demand Factor / Efficiency Factor
Production Possibilities Analysis 00
Growth and Production Possibilities / Labor and Productivity
Accounting for Growth 00
Labor Inputs versus Labor Productivity / Technological Advance / Quantity of 
Capital /
Education and Training / Economies of Scale and Resource Allocation
Consider This: Women, the Labor Force, and Economic Growth 00
The Recent Productivity Acceleration 00
Reasons for the Productivity Acceleration / Implication: More Rapid Economic 
Growth /
Skepticism about Permanence / What Can We Conclude?
Is Growth Desirable and Sustainable? 00
The Antigrowth View / In Defense of Economic Growth
Last Word: Economic Growth in China 00
Chapter 9
Business Cycles, Unemployment, and Inflation 00
The Business Cycle 00
Phases of the Business Cycle / Causation: A First Glance / Cyclical Impact: 
Durables and
Unemployment 00
Measurement of Unemployment / Types of Unemployment / Definition of Full
Employment / Economic Cost of Unemployment / Noneconomic Costs / International
Consider This: Why Is the Unemployment Rate in Europe So High? 00
Inflation 00
Meaning of Inflation / Measurement of Inflation / Facts of Inflation / Types of 
Inflation /
Consider This: Clipping Coins 00
Redistribution Effects of Inflation 00
Who Is Hurt by Inflation? / Who Is Unaffected or Helped by Inflation? / 
Inflation / Other Redistribution Issues
Does Inflation Affect Output?
Cost-Push Inflation and Real Output / Demand-Pull Inflation and Real Output /
Last Word: The Stock Market and the Economy 00
Macroeconomic Models and Fiscal Policy 00
Chapter 10
Basic Macroeconomic Relationships 00
The Income-Consumption and Income-Saving Relationships 00
The Consumption Schedule / The Saving Schedule / Average and Marginal 
Propensities /
Nonincome Determinants of Consumption and Saving / Other Important 
Consider This: What Wealth Effect? 00
The Interest-Rate?Investment Relationship 00
Expected Rate of Return / The Real Interest Rate / Investment Demand Curve / 
Shifts of
the Investment Demand Curve / Instability of Investment
The Multiplier Effect 00
Rationale / The Multiplier and the Marginal Propensities / How Large Is the 
Multiplier Effect?
Last Word: Squaring the Economic Circle 00
Chapter 11
The Aggregate Expenditures Model 00
Assumptions and Simplifications 00
Consumption and Investment Schedules 00
Equilibrium GDP: C + Ig = GDP 00
Tabular Analysis / Graphical Analysis
Other Features of Equilibrium GDP 00
Saving Equals Planned Investment / No Unplanned Changes in Inventories
Changes in Equilibrium GDP and the Multiplier 00
Adding International Trade 00
Net Exports and Aggregate Expenditures / The Net Export Schedule / Net Exports 
Equilibrium GDP / International Economic Linkages
Adding the Public Sector 00
Government Purchases and Equilibrium GDP / Taxation and Equilibrium GDP
Equilibrium versus Full-Employment GDP 00
Recessionary Expenditure Gap / Inflationary Expenditure Gap / Application: The 
Recession of 2001 / Application: Full-Employment Output, with Large Negative Net
Last Word: Say?s Law, the Great Depression, and Keynes 00
Chapter 12
Aggregate Demand and Aggregate Supply 00
Aggregate Demand 00
Aggregate Demand Curve
Changes in Aggregate Demand 00
Consumer Spending / Investment Spending / Government Spending / Net Export
Aggregate Supply 00
Aggregate Supply in the Immediate Short Run / Aggregate Supply in the Short Run 
Aggregate Supply in the Long Run / Focusing on the Short Run
Changes in Aggregate Supply 00
Input Prices / Productivity / Legal-Institutional Environment
Equilibrium and Changes in Equilibrium 00
Increases in AD: Demand-Pull Inflation / Decreases in AD: Recession and Cyclical
Unemployment / Decreases in AS: Cost-Push Inflation / Increases in AS: Full 
with Price-Level Stability
Consider This: Ratchet Effect 00
Last Word: Has the Impact of Oil Prices Diminished? 00
Chapter 29 Appendix: The Relationship of the Aggregate Demand Curve to the 
Expenditures Model 00
Chapter 13
Fiscal Policy, Deficits, and Debt 00
Fiscal Policy and the AD-AS Model 00
Expansionary Fiscal Policy / Contractionary Fiscal Policy / Policy Options: G or 
Built-In Stability 00
Automatic or Built-In Stabilizers
Evaluating Fiscal Policy 00
Standardized Budget / Recent U.S. Fiscal Policy / Budget Deficits and 
Projections / Social
Security Considerations
Problems, Criticisms, and Complications 00
Problems of Timing / Political Considerations / Future Policy Reversals / 
Offsetting State
and Local Finance / Crowding-Out Effect / Current Thinking on Fiscal Policy
The Public Debt 00
Ownership / Debt and GDP / International Comparisons / Interest Charges
False Concerns 00
Bankruptcy / Burdening Future Generations
Substantive Issues 00
Income Distribution / Incentives / Foreign-Owned Public Debt / Crowding-Out 
Last Word: The Leading Indicators 00
Money, Banking, and Monetary Policy 00
Chapter 14
Money and Banking 00
The Functions of Money 00
The Components of the Money Supply 00
Money Definition M1 / Money Definition M2
Consider This: Are Credit Cards Money? 00
What ?Backs? the Money Supply 00
Money as Debt / Value of Money / Money and Prices / Stabilizing Money?s 
The Federal Reserve and the Banking System 00
Historical Background / Board of Governors / The 12 Federal Reserve Banks / FOMC 
Commercial Banks and Thrifts / Fed Functions and the Money Supply / Federal 
Recent Developments in Money and Banking 00
The Relative Decline of Banks and Thrifts / Consolidation among Banks and 
Thrifts /
Convergence of Services Provided by Financial Institutions / Globalization of 
Markets / Electronic Payments
Last Word: The Global Greenback 00
Chapter 15
Money Creation 00
The Fractional Reserve System 00
Illustrating the Idea: The Goldsmiths / Significant Characteristics of 
Fractional Reserve
A Single Commercial Bank 00
Transaction: Creating a Bank / Transaction 2: Acquiring Property and Equipment /
Transaction 3: Accepting Deposits / Transaction 4: Depositing Reserves in a 
Reserve Bank / Transaction 5: Clearing a Check Drawn against the Bank
Money-Creating Transactions of a Commercial Bank 00
Transaction 6: Granting a Loan / Transaction 7: Buying Government Securities / 
Liquidity, and the Federal Funds Market
The Banking System: Multiple-Deposit Expansion 00
The Banking System?s Lending Potential / The Monetary Multiplier / 
Reversibility: The
Multiple Destruction of Money
Last Word: The Bank Panics of 1930 to 1933 00
Chapter 16
Interest Rates and Monetary Policy 00
Interest Rates 00
The Demand for Money / The Equilibrium Interest Rate / Interest Rates and Bond 
The Consolidated Balance Sheet of the Federal Reserve Banks 00
Assets / Liabilities
Tools of Monetary Policy 00
Open-Market Operations / The Reserve Ratio / The Discount Rate / Term Auction
Facility / Relative Importance
Targeting the Federal Funds Rate 00
Expansionary Monetary Policy / Restrictive Monetary Policy / The Taylor Rule
Consider This: The Fed as a Sponge 00
Monetary Policy, Real GDP, and the Price Level 00
Cause-Effect Chain / Effects of an Expansionary Monetary Policy
Monetary Policy: Evaluation and Issues 00
Recent U.S. Monetary Policy / Problems and Complications / ?Artful Management? 
?Inflation Targeting??
Consider This: Pushing on a String 00
The ?Big Picture? 00
Last Word: The Mortgage Debt Crisis: The Fed Responds 00
Chapter 17
Financial Economics 00
Financial Investment 00
Present Value 00
Compound Interest / The Present Value Model / Applications
Some Popular Investments 00
Stocks / Bonds / Mutual Funds / Calculating Investment Returns / Asset Pricies 
Rates of Return
Arbitrage 00
Risk 00
Diversification / Comparing Risky Investments / Relationship of Risk and Average
Expected Rates of Return / The Risk-Free Rate of Return
The Security Market Line 00
Consider This: Does Ethical Investing Increase Returns? 00
An Increase in the Risk-Free Rate 00
Last Word: Why Do Index Funds Beat Actively Managed Funds? 00
Extensions and Issues 00
Chapter 18
Extending the Analysis of Aggregate Supply 00
From Short Run to Long Run 00
Short-Run Aggregate Supply / Long-Run Aggregate Supply / Long-Run Equilibrium in 
AD-AS Model
Applying the Extended AD-AS Model 00
Demand-Pull Inflation in the Extended AD-AS Model / Cost-Push Inflation in the
Extended AD-AS Model / Recession and the Extended AD-AS Model / Ongoing 
in the Extended AD-AS Model
The Inflation-Unemployment Relationship 00
The Phillips Curve / Aggregate Supply Shocks and the Phillips Curve
The Long-Run Phillips Curve 00
Short-Run Phillips Curve / Long-Run Vertical Phillips Curve / Disinflation
Taxation and Aggregate Supply 00
Taxes and Incentives to Work / Incentives to Save and Invest / The Laffer Curve 
Criticisms of the Laffer Curve / Rebuttal and Evaluation
Consider This: Sherwood Forest 00
Last Word: Tax Cuts for Whom? A Supply-Side Anecdote 00
Chapter 19
Current Issues in Macro Theory and Policy 00
What Causes Macro Instability? 00
Mainstream View / Monetarist View / Real-Business-Cycle View / Coordination 
Does the Economy ?Self-Correct?? 00
New Classical View of Self-Correction / Mainstream View of Self-Correction
Rules or Discretion? 00
In Support of Policy Rules / In Defense of Discretionary Stabilization Policy / 
Macro Stability
Consider This: On the Road Again 00
Summary of Alternative Views 00
Last Word: The Taylor Rule: Could a Robot Replace Ben Bernanke? 00
International Economics 00
Chapter 20
International Trade 00
Some Key Facts 00
The Economic Basis for Trade 00
Comparative Advantage: Graphical Analysis 00
Two Isolated Nations / Specializing Based on Comparative Advantage / Terms of 
Trade /
Gains from Trade / Trade with Increasing Costs / The Case for Free Trade
Supply and Demand Analysis of Exports and Imports 00
Supply and Demand in the United States / Supply and Demand in Canada / 
World Price, Exports, and Imports
Trade Barriers 00
Economic Impact of Tariffs / Economic Impact of Quotas / Net Costs of Tariffs 
The Case for Protection: A Critical Review 00
Military Self-Sufficiency Argument / Diversification-for-Stability Argument / 
Industry Argument / Protection-against-Dumping Argument / Increased Domestic
Employment Argument / Cheap Foreign Labor Argument
Consider This: Shooting Yourself in the Foot 00
The World Trade Organization 00
Last Word: The WRO Protests 00
Chapter 21
The Balance of Payments, Exchange Rates, and Trade Deficits 00
International Financial Transactions 00
The Balance of Payments 00
Current Account / Capital and Financial Account / Why the Balance of Payments
Balances / Payments, Deficits, and Surpluses
Flexible Exchange Rates 00
Depreciation and Appreciation / Determinants of Exchange Rates / Flexible Rates 
the Balance of Payments / Disadvantages of Flexible Exchange Rates
Consider This: The Big Mac Index 00
Fixed Exchange Rates 00
Use of Reserves / Trade Policies / Exchange Controls and Rationing / Domestic
Macroeconomic Adjustments
The Current Exchange Rate System: The Managed Float 00
Recent U.S. Trade Deficits 00
Causes of the Trade Deficits / Implications of U.S. Trade Deficits
Last Word: Speculation in Currency Markets 00
WEB Supplement 21
Previous International Exchange-Rate Systems 00
The Gold Standard: Fixed Exchange Rates 00
Gold Flows / Domestic Macroeconomic Adjustments / Collapse of the Gold Standard
The Bretton Woods System 00
IMF and Pegged Exchange Rates / Fundamental Imbalances: Adjusting the Peg / 
of the Bretton Woods System
WEB Chapter 22
The Economics of Developing Countries 00
The Rich and the Poor 00
Classifications / Comparisons / Growth, Decline, and Income Gaps / The Human 
of Poverty
Obstacles to Economic Development 00
Natural Resources / Human Resources / Capital Accumulation / Technological 
Advance /
Sociocultural and Institutional Factors
The Vicious Circle 00
The Role of Government 00
A Positive Role / Public Sector Problems
The Role of Advanced Nations 00
Expanding Trade / Foreign Aid: Public Loans and Grants / Flows of Private 
Where from Here? 00
DVC Policies for Promoting Growth / IAC Policies for Fostering DVC Growth
Last Word: Famine in Africa 00
Glossary G-1
Index IND-1

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