Macroeconomics: Private Markets and Public Choice / Edition 5

Macroeconomics: Private Markets and Public Choice / Edition 5

by Robert B. Ekelund
     
 

ISBN-10: 0201918978

ISBN-13: 9780201918977

Pub. Date: 01/28/1997

Publisher: Addison-Wesley

Product Details

ISBN-13:
9780201918977
Publisher:
Addison-Wesley
Publication date:
01/28/1997
Edition description:
Older Edition
Pages:
816

Table of Contents

PART 1 THE POWER OF ECONOMIC THINKING 1(112)
CHAPTER 1 Economics in Perspective
2(23)
WHAT ECONOMICS IS
3(2)
Economics: A Working Definition
3(1)
The Economic Condition: Scarcity
3(2)
Focus: Scarcity, Economizing, and the College Student's Time
5(3)
Scarce Resources and Economic Problems
5(1)
Other Factors Affecting Resources and Growth
6(2)
KEY PRINCIPLES OF ECONOMIC THINKING
8(7)
Resources and Activities Cost More Than You Think
8(1)
Economic Behavior Is Rational
9(1)
Choices Are Made at the Margin
10(1)
Prices Are Signals to Producers and Consumers
11(1)
Public Choices Are Different from Private Choices
12(1)
Economists Do Not Decide Who Gets What
12(1)
We All Want Money, But Not Too Much
13(1)
Voters Choose the Role of Government--The Economist Analyzes
14(1)
THE ROLE OF THEORY IN ECONOMICS
15(1)
THE ROLE OF ECONOMICS AND ECONOMISTS
15(2)
Positive and Normative Economics
16(1)
Microeconomics and Macroeconomics
16(1)
Let's Get to Work
17(1)
SUMMARY
17(1)
KEY TERMS
18(1)
QUESTIONS FOR REVIEW AND DISCUSSION
18(1)
APPENDIX: WORKING WITH GRAPHS
19(5)
The Purpose of Graphs
19(1)
How to Draw a Graph
19(3)
Slope of the Curve
22(2)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION
24(2)
CHAPTER 2 Opportunity Cost, Specialization, and Trade
25(29)
SPECIALIZATION AND TRADE: A FEATURE OF ALL SOCIETIES
26(1)
Focus: Economic Specialization in Everyday Life: Marriage and Roommate Selection
27(1)
OPPORTUNITY COST: THE INDIVIDUAL MUST CHOOSE
28(3)
OPPORTUNITY COST AND PRODUCTION POSSIBILITIES: SOCIETY MUST CHOOSE
31(3)
The Law of Increasing Costs
33(1)
WHY THE PRODUCTION POSSIBILITIES FRONTIER SHIFTS
34(3)
The Shifting Frontier
34(1)
Economic Growth: How Economies Progress
35(2)
COMPARATIVE ADVANTAGE
37(10)
Specialization
39(1)
Trade: The Fruits of Specialization
40(2)
Factors Explaining Comparative Advantage
42(1)
Exchange Costs
43(4)
Focus: Free Trade Associations, Past and Present
47(3)
Application: When a Rose Is Not a Rose: Interest Groups and Shifting Comparative Advantage in the Flower Industry
50(3)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEMS
53-53(1)
CHAPTER 3 Private Markets and Prices: Laws of Demand and Supply
54(32)
AN OVERVIEW OF THE PRICE SYSTEM
55(3)
The Circular Flow of Products and Resources
55(2)
Full versus Money Prices
57(1)
Focus: Full Price and a New Orleans Restaurant
58(1)
THE LAW OF DEMAND
58(9)
The Individual's Demand Schedule and Demand Curve
59(1)
Factors Affecting the Individual's Demand Curve
60(5)
Reviewing the Law of Demand
65(1)
From Individual to Market Demand
65(2)
THE LAW OF SUPPLY AND FIRM SUPPLY
67(4)
Changes in Quantity Supplied and Shifts in the Supply Curve
68(2)
Market Supply
70(1)
MARKET EQUILIBRIUM PRICE AND OUTPUT
71(7)
The Mechanics of Price Determination
71(2)
Price Rationing
73(1)
Effects on Price and Quantity of Shifts in Supply or Demand
74(4)
SIMPLE SUPPLY AND DEMAND ANALYSIS: SOME FINAL CONSIDERATIONS
78(4)
Price Controls and Public Choice
78(4)
Application: Students' Public Choice: The Effects of Rent Controls in College Towns
82(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEMS
83-84(1)
CHAPTER 4 Demand and Supply: Property, Markets, and Public Choice
86(27)
INSTITUTIONS ARE "RULES OF THE GAME" THAT FACILITATE MARKETS
87(4)
Property Rights and Contracts
88(1)
Property Rights and Economic Incentives
89(1)
Private Competitive Markets
90(1)
WHY ARE PRIVATE COMPETITIVE MARKETS EFFICIENT?
91(6)
Demanders Value Goods
92(2)
Supply, Costs and Value
94(2)
Competitive Equilibrium and Economic Efficiency
96(1)
THE ROLE OF GOVERNMENT
97(5)
Externalities and Market Failure
98(2)
Public Goods and Market Failure
100(1)
Antitrust and Monopoly Regulation
101(1)
PUBLIC CHOICE--THE RELATION BETWEEN POLITICS AND ECONOMIC EFFICIENCY
102(1)
Political versus Economic Markets
102(1)
Focus: "Is Student Government Different from Joining a Health Club?"
103(2)
Why Are Voters "Myopic"?
103(1)
Interest Groups Tend to Dominate
104(1)
INTEREST GROUPS AND WEALTH TRANSFERS: THE CASE OF BARBERS
105(3)
Application: Why Are There So Many Restaurants and Golf Courses in State Capital Cities?
108(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION
109-110(1)
Point/Counterpoint: Adam Smith and Karl Marx: Markets and Society
111(2)
PART 2 THE FUNDAMENTALS OF MACROECONOMICS 113(157)
CHAPTER 5 Contemporary Macroeconomics
114(24)
THE GOALS OF MACROECONOMICS
115(9)
The Full-Employment Goal
115(4)
The Goal of Price Stability
119(3)
The Objective of Economic Growth
122(2)
Global Objectives
124(1)
STABILITY, GROWTH, AND BUSINESS CYCLES
124(4)
Business Cycles in the United States
126(1)
Forecasting Business Cycles
126(2)
THE COSTS OF BUSINESS CYCLES
128(3)
Who Pays for Business Downturns?
129(2)
AGGREGATE DEMAND, AGGREGATE SUPPLY, AND MACROECONOMIC POLICY
131(2)
Aggregate Demand and Aggregate Supply
131(2)
MACROECONOMIC ISSUES: CAN GOALS BE MET IN A WORLD OF POLITICS?
133(2)
Can Discretionary Macroeconomic Policy Work?
133(1)
Demand-Side Versus Supply-Side Policies
134(1)
Focus: Do Politicians Create Ups and Downs in the Business Cycle?
135(1)
MODERN MACROECONOMICS: A MIXED APPROACH
135(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION
136-137(1)
CHAPTER 6 Measuring the Macroeconomy
138(18)
AGGREGATE ACCOUNTING AND THE CONCEPT OF GDP
139(2)
What GDP Does Not Count
140(1)
GDP as a Measure of Economic Welfare
140(1)
NATIONAL INCOME ACCOUNTING
141(8)
The Circular Flow of Economic Activity
141(1)
Leakages and Injections: Some Complications
141(2)
The Flow of Expenditures Approach
143(3)
The Flow of Earnings Approach
146(2)
Other National Income Concepts
148(1)
Personal Saving
149(1)
THE MEASUREMENT OF PRICE CHANGES
149(2)
The Consumer Price Index
150(1)
Focus: Should You Trust GDP as an Economic Measure?
151(2)
The Implicit Price Deflator
151(2)
Application: Beating the IRS: How Big Is the Underground Economy?
153(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEMS
154-155(1)
CHAPTER 7 Classical Macroeconomic Theory
156(21)
CLASSICAL THEORY
157(13)
The Classical Blueprint for Economic Growth
157(4)
Aggregate Demand, Aggregate Supply, and the Macroeconomic Problem
161(2)
Cornerstones of Classical Macroeconomic Theory
163(7)
CLASSICAL THEORY AND POLICY: THE MEANING OF A SELF-ADJUSTING ECONOMY
170(3)
Classical Policies for Rapid Self-Adjustment
171(1)
Classical Theory and Policy: Summary
172(1)
Focus: The Factory Acts and Macroeconomy of Nineteenth-Century England
173(1)
Application: How Classical Economics Affects You
174(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION
175-176(1)
CHAPTER 8 Keynesian Macroeconomics
177(33)
KEYNES AND THE CLASSICALS
178(1)
THE INCOME-EXPENDITURES MODEL
179(9)
Private Consumption Expenditures
180(1)
Consumption and Saving Functions
180(1)
The Keynesian Model of the Private Economy
181(4)
Nonincome Factors Influencing Consumption and Saving
185(2)
Investment Expenditures
187(1)
Focus: Does Keynes's Consumption Theory Stand Up to the Facts?
188(2)
PRIVATE INCOME-EXPENDITURES EQUILIBRIUM
190(3)
Total Expenditures Equal Total Output
191(2)
FLUCTUATIONS IN THE PRIVATE SECTOR
193(3)
Instability in the Economy: The Expenditure Multiplier
194(2)
CONTRACTIONARY AND EXPANSIONARY GAPS
196(1)
GOVERNMENT SPENDING AND TAXATION
196(4)
Government Expenditures
196(1)
The Effects of Taxation
197(3)
INTERNATIONAL TRADE AND THE GLOBAL ECONOMY
200(1)
COUNTERCYCLICAL FISCAL POLICIES
201(4)
Fiscal Policy to Deal with a Recession
201(2)
Fiscal Policy to Deal with Inflation
203(1)
Keynesian Economics in Historical Context
204(1)
Focus: How the Political System Helps Create Deficits
205(1)
Application: Mortgaging Your Future: The Government and Your Incentive to Save
206(2)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEMS
208-209(1)
CHAPTER 9 Aggregate Demand and Aggregate Supply
210(18)
PRICE CHANGES AND AGGREGATE DEMAND
211(5)
Price Changes and Changes in Purchasing Power
211(1)
The Real Balance Effect
212(2)
Interest Rate Effect
214(2)
AGGREGATE DEMAND
216(4)
Deriving the Aggregate Demand Curve
216(1)
The Shape of the Aggregate Demand Curve
216(2)
Shifts in the Aggregate Demand Curve
218(2)
AGGREGATE SUPPLY
220(2)
The Shape of the Aggregate Supply Curve
220(1)
Shifts and "Shocks" in the Aggregate Supply Curve
220(2)
Focus: Black Death and Black Gold: Aggregate Supply Shifts Throughout History
222(1)
THE EQUILIBRIUM LEVEL OF PRICES AND PRODUCTION
223(1)
Application: Uses of Demand and Supply Analysis: The Problem of Stagflation
224(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEM
225-227(2)
CHAPTER 10 Fiscal Policy and the Supply Side: Using the Tools
228(17)
POLICIES DESIGNED TO SHIFT AGGREGATE DEMAND
229(2)
Classical and Keynesian Perspectives
229(2)
Focus: "Did Keynesian Economics and World War II Save Us from the Depression?"
231(2)
Fiscal Policy and Demand Management
232(1)
Focus: Politics and Fiscal Policy: How Brave Are Politicians Anyway?
233(2)
Demand and Supply Interaction
234(1)
Possible Limits to Discretionary Demand Management
235(1)
AGGREGATE SUPPLY POLICIES
235(5)
Aggregate Supply and Resource Employment
236(1)
Supply-Side Economic Policies
237(3)
The Impact of Supply-Side Policies
240(1)
DEMAND AND SUPPLY INTERACTION: PROBLEMS AND PROSPECTS
240(1)
Application: The Impact of Freer Trade on the Macroeconomy
241(2)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEM
243-244(1)
CHAPTER 11 Taxes, Deficits, and the Debt
245(26)
FISCAL POLICY IN PRACTICE
246(4)
Tax Structures
246(1)
How Much Is Discretion? How Much Is Automatic?
246(2)
Fiscal Policy and the Budget
248(1)
The Federal Budget: Process and Problems
248(2)
PUBLIC FINANCE
250(5)
Government Expenditures
250(4)
Tax Revenues
254(1)
FEDERAL TAXATION, TAX REFORM, AND FISCAL POLICY
255(3)
Income and Corporate Taxes
256(2)
DEFICITS, DEBTS, AND FISCAL POLICY
258(3)
Growing Deficits
258(1)
Deficits, Fiscal Policy, and Crowding Out
259(1)
Deficits and the Federal Debt
259(2)
Focus: Who Bears the Burden of the Debt?
261(1)
THE EFFECTS OF THE FEDERAL DEBT
262(2)
Can the Federal Deficits and Debt Be Controlled?
263(1)
Application: Deficits, Debt, and the Average American
264(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEMS
265-267(2)
Point/Counterpoint: J. M. Keynes and Joseph Schumpeter: Intervention or Innovation?
268(2)
PART 3 MONEY 270(57)
CHAPTER 12 Money, Banking, and the Federal Reserve
271(29)
FUNCTIONS OF MONEY
272(3)
Money as a Medium of Exchange
272(2)
Money as a Unit of Account
274(1)
Money as a Store of Value
274(1)
THE OFFICIAL DEFINITION OF MONEY
275(2)
MONEY AND THE BANKING SYSTEM
277(2)
The U.S. Banking and Financial System
278(1)
Focus: Can a Pub Become a Bank? The Modern Case of Ireland
279(4)
The Federal Reserve System
281(2)
HOW BANKS CREATE MONEY
283(4)
Money Expansion in the Multibank System
284(2)
Money Supply Leakages
286(1)
Government Regulations
287(1)
HOW THE FEDERAL RESERVE CONTROLS MONEY CREATION
287(1)
METHODS OF FEDERAL RESERVE CONTROL
288(6)
Open Market Operations
288(4)
Loans to Banks: The Discount Rate
292(1)
Changing the Reserve Requirement
293(1)
MONETARY CONTROL: RESERVES, THE MONETARY BASE, AND THE MONEY SUPPLY
294(2)
How the Money Stock Is Determined by the Fed
295(1)
Federal Reserve Controls
295(1)
Application: Moral Hazard and the Savings and Loan Crisis
296(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEM
297-299(2)
CHAPTER 13 Money and Inflation
300(27)
THE DEMAND FOR MONEY
301(2)
Transactions Demand
301(1)
Precautionary Demand
301(1)
Speculative Demand
302(1)
THE QUANTITY THEORY OF MONEY
303(2)
The Simple Quantity Theory
303(1)
Money and Relative Prices
304(1)
The Simple Quantity Theory: Transmission Mechanism
305(1)
SPECULATIVE MONEY DEMAND AND PRICES: KEYNES'S PERSPECTIVE
305(2)
The Importance of Speculative Demand
306(1)
Focus: Counterfeiting and the Quantity of Money Theory
307(2)
Money and Prices: The Keynesian Transmission Mechanism
308(1)
MODERN MONETARISM AND INFLATION
309(4)
The Process of Inflation
310(2)
Some Preliminary Lessons About Inflation
312(1)
INFLATION
313(4)
The Effects of Inflation
313(4)
THEORIES OF INFLATION
317(3)
Cost-Push Theories of Inflation
318(1)
Demand-Pull Theories of Inflation
319(1)
CURES FOR INFLATION
320(1)
Nondiscretionary Cures
320(1)
Discretionary Cures
320(1)
Application: Politics and Inflation: A Global Perspective
321(2)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEMS
323-324(1)
Point/Counterpoint: Milton Friedman and James Tobin: How Important Is the Money Supply?
325(2)
PART 4 MACROECONOMIC POLICY AND ECONOMIC GROWTH 327(48)
CHAPTER 14 Macroeconomic Theory and Policy
328(21)
POLICY ALTERNATIVES
329(1)
Focus: The President's Council of Economic Advisers
330(1)
NEW KEYNESIAN THEORY AND POLICY
331(4)
An Unstable Economy
332(1)
Countercyclical Fiscal Policy
333(1)
Keynesian Monetary Policy
333(2)
NEW CLASSICAL ECONOMICS: MONETARIST THEORY AND POLICY
335(5)
A Self-Stabilizing Economy
335(1)
Errors in Real Wage Perceptions
336(1)
Destabilizing Effects of Fiscal and Monetary Policies
337(3)
Focus: Homelessness and Unemployment: The Limits of Discretionary Policy
340(1)
NEW CLASSICAL ECONOMICS: RATIONAL EXPECTATIONS
341(1)
The Rational Expectations Hypothesis
341(1)
NEW KEYNESIAN CRITICISMS OF NEW CLASSICAL ECONOMICS
342(2)
THE MAJOR POLICY POSITIONS: A SUMMARY
344(2)
Application: Should Congress Be Forced to Balance the Budget?
346(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEM
347-348(1)
CHAPTER 15 Global Economic Growth and Development
349(26)
THE MEANING OF ECONOMIC GROWTH
350(3)
The Causes of Growth
350(2)
The Production Possibilities Frontier Revisited
352(1)
Focus: The Japanese Economy: Model for Growth and Development?
353(3)
Comparative Growth Rates
355(1)
GROWTH AND MODERN MACROECONOMIC THEORY
356(2)
The Demand Side of Growth
356(1)
The Supply Side of Growth
356(2)
RECENT U.S. ECONOMIC GROWTH AND PRODUCTIVITY
358(3)
Capital Formation
358(1)
Saving
359(1)
Productivity
359(2)
ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT
361(6)
The Characteristics of Developing Countries
362(2)
Property Rights Arrangements and Economic Growth
364(3)
LOOKING AHEAD: EXPLAINING ECONOMIC GROWTH AND DEVELOPMENT
367(2)
U.S. Growth
367(1)
U.S. Growth and Global Development
368(1)
Application: Infrastructure, Economic Growth, and Clintonomics
369(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEM
370-372(2)
Point/Counterpoint: Paul Samuelson and Robert Lucas: Do We Need Discretion or Discipline in Policy?
373(2)
PART 5 THE GLOBAL ECONOMY 375(59)
CHAPTER 16 International Trade
376(29)
THE IMPORTANCE OF INTERNATIONAL TRADE
377(9)
National Involvement in International Trade
378(1)
Why Trade Is Important: Comparative Advantage
379(6)
Tariffs and Quotas
385(1)
THE EFFECTS OF ARTIFICIAL TRADE BARRIERS
386(7)
Trade and Tariffs: Who Gains? Who Loses?
386(1)
The Benefits of Free Trade
387(2)
Welfare Loss from Tariffs
389(2)
Why Are Tariffs Imposed?
391(1)
Nontariff Barriers to Trade
391(1)
A Quota Is a Quota Is a Tariff
392(1)
THE CASE FOR PROTECTION
393(1)
Focus: Autos, Peanuts, and Politics: How Quotas Affect You
394(4)
National Interest Arguments for Protection
394(2)
Industry Arguments for Protection
396(2)
U.S TARIFF POLICY
398(4)
Early Tariff Policy
400(1)
Modern Tariff Policy
400(1)
Where Does the United States Stand in the Battle for Free Trade?
401(1)
Application: NAFTA: Free Trade or Free-for-All?
402(1)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEMS
403-404(1)
CHAPTER 17 International Finance
405(29)
THE FOREIGN EXCHANGE MARKET
406(3)
Exchange Rates
406(2)
Exchange Rate Systems
408(1)
FLEXIBLE EXCHANGE RATES
409(6)
Exchange Rates between Two Countries
409(2)
Changes in Flexible Exchange Rates
411(4)
FIXED EXCHANGE RATES
415(4)
The Operation of a Fixed Rate System
415(1)
Fixed Exchange Rates
416(3)
MACROECONOMIC POLICY EXCHANGE RATES, AND TRADE BALANCE
419(1)
Monetary Policy
419(1)
Focus: Should We Return to a Gold Standard?
420(1)
Fiscal Policy
421(1)
THE BALANCE OF PAYMENTS
421(3)
Exports and Imports: The Balance of Trade
422(1)
Net Transfers Abroad
423(1)
Current Account Balance
423(1)
Net Capital Movements
423(1)
Statistical Discrepancy
423(1)
The Balance of Payments and the Value of the Dollar
424(1)
THE EVOLUTION OF INTERNATIONAL MONETARY INSTITUTIONS
424(4)
The Decline of the Gold Standard
424(1)
Bretton Woods and the Postwar System
424(2)
The Current International Monetary System
426(2)
Application: Trade Deficits, Flexible Exchange Rates, and the Competitiveness of the U.S. Economy
428(2)
SUMMARY/KEY TERMS/QUESTIONS FOR REVIEW AND DISCUSSION/PROBLEM
430-431(1)
Point/Counterpoint: P.T. Bauer and Gunnar Myrdal: Third World Development and Trade
432(2)
GLOSSARY 434(7)
INDEX 441

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