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McGraw-Hill Companies, The
Macroeconomics / Edition 18

Macroeconomics / Edition 18

by Campbell R. McConnell


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Product Details

ISBN-13: 2900073365946
Publisher: McGraw-Hill Companies, The
Publication date: 11/14/2008
Edition description: Older Edition
Pages: 512
Product dimensions: 6.00(w) x 1.25(h) x 9.00(d)

About the Author

Campbell R. McConnell earned his Ph.D. from the University of Iowa after receiving degrees from Cornell College and the University of Illinois. He taught at the University of Nebraska-Lincoln from 1953 until his retirement in 1990. He is also coauthor of Contemporary Labor Economics, Seventh edition, and Essentials of Economics, First edition (both The McGraw-Hill Companies), and has edited readers for the principles and labor economics courses. He is a recipient of both the University of Nebraska Distinguished Teaching Award and the James A. Lake Academic Freedom Award, and is past-president of the Midwest Economics Association. Professor McConnell was awarded an honorary Doctor of Laws degree from Cornell College in 1973 and received its Distinguished Achievement Award in 1994.

Sean is an assistant professor of economics at Scripps College in Claremont, California.

He is the author of the international best seller "Economics for Dummies" as well as the coauthor, along with Campbell McConnell and Stanley Brue, of the world's best-selling college economics textbook, "Economics: Principles, Problems, and Policies".

An avid martial artist, Sean is a former Aikido national champion and has coached five of his students to U.S. national aikido titles.

A recurring commentator on FOX Business, ABC News, and NPR, Sean holds a B.A. in economics from the University of Southern California and a Ph.D. in economics from U.C. Berkeley, where he completed his dissertation under the supervision of Nobel Laureate George Akerlof.

Sean's research focuses on the often puzzling and seemingly irrational behavior of stock market investors, but he's also investigated topics as wide-ranging as the factors that affect customer tipping behavior at restaurants and why you see a lot of unionized workers only in certain industries.

Stanley L. Brue did his undergraduate work at Augustana College (South Dakota) and received its Distinguished Achievement Award in 1991. He received his Ph.D. from the University of Nebraska–Lincoln. He is a professor at Pacific Lutheran University, where he has been honored as a recipient of the Burlington Northern Faculty Achievement Award. Professor Brue has also received the national Leavey Award for excellence in economic education. He has served as national president and chair of the Board of Trustees of Omicron Delta Epsilon International Economics Honorary. He is coauthor of Economic Scenes, Fifth edition (Prentice-Hall), Contemporary Labor Economics, Seventh edition, Essentials of Economics, First edition (both The McGraw-Hill Companies), and The Evolution of Economic Thought, Seventh edition (South-Western).

Table of Contents

List of Key Graphsvi
Part 1An Introduction to Economics and the Economy
To the Student2
1The Nature and Method of Economics3
The Economic Perspective3
Consider This: Free for All?4
Why Study Economics?5
Economic Methodology6
Macroeconomics and Microeconomics9
Pitfalls to Sound Reasoning10
A Look Ahead12
Last Word: Fast-Food Lines: An Economic Perspective12
Appendix Chapter 1Graphs and Their Meaning15
2The Economizing Problem22
The Foundation of Economics22
Economics: Employment and Efficiency24
Unemployment, Growth, and the Future28
Consider This: A Matter of Degrees: Is College Worth the Cost?32
Economic Systems33
The Circular Flow Model34
Last Word: September 11, 2001, and the War on Terrorism35
3Individual Markets: Demand and Supply39
Supply and Demand: Market Equilibrium48
Consider This: The Cutting Edge50
Application: Government-Set Prices52
Last Word: Ticket Scalping: A Bum Rap?55
3WebApplications and Extensions of Supply and Demand Analysis59
Changes in Supply and Demand1
Preset Prices4
Consider This: Taking Back a "Gift"5
Nonpriced Goods: The American Bison6
Consumer and Producer Surplus7
Last Word: Efficiency Gains from Generic Drugs11
4The Market System60
Characteristics of the Market System60
The Market System at Work64
Consider This: McHits and McMisses66
Competition and the "Invisible Hand"69
Last Word: Shuffling the Deck70
5The U.S. Economy: Private and Public Sectors73
Households as Income Receivers73
Households as Spenders74
The Business Population75
Legal Forms of Businesses76
The Public Sector: Government's Role79
Consider This: Street Entertainers82
The Circular Flow Revisited83
Government Finance84
Federal Finance85
State and Local Finance87
Last Word: The Financing of Corporations88
6The United States in the Global Economy91
International Linkages91
The United States and World Trade92
Specialization and Comparative Advantage96
The Foreign Exchange Market99
Consider This: A Ticket to Ride100
Government and Trade101
Multilateral Trade Agreements and Free-Trade Zones103
Global Competition106
Last Word: Petition of the Candlemakers, 1845106
Part 2Macroeconomic Measurement and Basic Concepts
7Measuring Domestic Output and National Income112
Assessing the Economy's Performance112
Gross Domestic Product112
The Expenditures Approach115
Consider This: Stock Answers about Flows117
The Income Approach118
Other National Accounts120
Nominal GDP versus Real GDP123
Shortcomings of GDP125
Last Word: Feeding the GDP Accounts127
8Introduction to Economic Growth and Instability131
Economic Growth131
The Business Cycle133
Consider This: Clipping Coins143
Redistribution Effects of Inflation144
Effects of Inflation on Output147
Last Word: The Stock Market and the Economy149
9Basic Macroeconomic Relationships152
The Income-Consumption and Income-Saving Relationships152
Consider This: What Wealth Effect?159
The Interest-Rate-Investment Relationship159
The Multiplier Effect164
Last Word: Squaring the Economic Circle167
Part 3Macroeconomic Models and Fiscal Policy
10The Aggregate Expenditures Model172
Consumption and Investment Schedules172
Equilibrium GDP: C + I[subscript g] = GDP173
Other Features of Equilibrium GDP176
Changes in Equilibrium GDP and the Multiplier177
Adding International Trade179
Adding the Public Sector182
Equilibrium versus Full-Employment GDP185
Limitations of the Model187
Last Word: Say's Law, the Great Depression, and Keynes188
11Aggregate Demand and Aggregate Supply193
Aggregate Demand193
Aggregate Supply197
Equilibrium and Changes in Equilibrium201
Consider This: Ratchet Effect205
Last Word: Why Is Unemployment in Europe So High?207
Appendix Chapter 11The Relationship of the Aggregate Demand Curve to the Aggregate Expenditures Model211
12Fiscal Policy214
Legislative Mandates214
Fiscal Policy and the AD-AS Model215
Built-In Stability218
Evaluating Fiscal Policy220
Problems, Criticisms, and Complications223
Last Word: The Leading Indicators227
Current Thinking on Fiscal Policy228
Part 4Money, Banking, and Monetary Policy
13Money and Banking232
The Functions of Money232
The Supply of Money233
Consider This: Are Credit Cards Money?236
What "Backs" the Money Supply?236
The Demand for Money238
The Money Market240
The Federal Reserve and the Banking System242
Recent Developments in Money and Banking245
Last Word: The Global Greenback248
14How Banks and Thrifts Create Money252
The Balance Sheet of a Commercial Bank252
Prologue: The Goldsmiths252
A Single Commercial Bank253
The Banking System: Multiple-Deposit Expansion260
Last Word: The Bank Panics of 1930 to 1933265
15Monetary Policy268
Consolidated Balance Sheet of the Federal Reserve Banks268
Tools of Monetary Policy270
Monetary Policy, Real GDP, and the Price Level276
Monetary Policy in Action279
Consider This: Pushing on a String282
The "Big Picture"286
Last Word: For the Fed, Life Is a Metaphor287
Part 5Long-Run Perspectives and Macroeconomic Debates
16Extending the Analysis of Aggregate Supply292
From Short Run to Long Run292
Applying the Extended AD-AS Model295
The Inflation-Unemployment Relationship297
The Long-Run Phillips Curve300
Taxation and Aggregate Supply302
Consider This: Sherwood Forest304
Last Word: Has the Impact of Oil Prices Diminished?305
17Economic Growth308
Ingredients of Growth308
Production Possibilities Analysis309
U.S. Economic Growth Rates312
Accounting for Growth312
Consider This: Economic Growth Rates Matter!313
The Productivity Acceleration: A New Economy?316
Is Growth Desirable and Sustainable?320
Last Word: Women and Economic Growth322
18Deficits, Surpluses, and the Public Debt325
Deficits, Surpluses, and Debt: Definitions325
Budget Philosophies325
The Public Debt: Facts and Figures326
False Concerns329
Substantive Issues330
Deficits and Surpluses: 1992-2012332
Last Word: The Long-Run Fiscal Imbalance: Social Security334
19Disputes over Macro Theory and Policy338
Some History: Classical Economics and Keynes338
What Causes Macro Instability?340
Does the Economy "Self-Correct"?344
Rules or Discretion?347
Consider This: On the Road Again348
Summary of Alternative Views350
Last Word: The Taylor Rule: Could a Robot Replace Alan Greenspan?351
Part 6International Economics and the World Economy
20International Trade356
Some Key Facts356
The Economic Basis for Trade357
Comparative Advantage: Graphical Analysis358
Supply and Demand Analysis of Exports and Imports363
Trade Barriers366
The Case for Protection: A Critical Review369
Consider This: Shooting Yourself in the Foot370
Last Word: The WTO Protests372
The World Trade Organization373
21Exchange Rates, the Balance of Payments, and Trade Deficits377
Financing International Trade377
The Balance of Payments378
Flexible Exchange Rates381
Consider This: The Big Mac Index383
Fixed Exchange Rates386
International Exchange-Rate Systems388
Recent U.S. Trade Deficits392
Last Word: Speculation in Currency Markets394
22WebThe Economics of Developing Countries397
The Rich and the Poor1
Obstacles to Economic Development3
The Vicious Circle10
Role of Government11
Role of Advanced Nations12
Where from Here?15
Last Word: Famine in Africa16
23WebTransition Economies: Russia and China398
Ideology and Institutions1
State Ownership and Central Planning2
Problems with Central Planning3
Collapse of the Soviet Economy5
The Russian Transition to a Market System6
Market Reforms in China10
Outcomes and Prospects11
Last Word: Police Smash Down Smirnov's Doors14

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