OpenStax Macroeconomics 2e

Table of Contents

• • Preface

• Welcome to Economics!

• • Introduction
  • What Is Economics, and Why Is It Important?
  • Microeconomics and Macroeconomics
  • How Economists Use Theories and Models to Understand Economic Issues
  • How To Organize Economies: An Overview of Economic Systems

• Choice in a World of Scarcity

• • Introduction to Choice in a World of Scarcity
  • How Individuals Make Choices Based on Their Budget Constraint
  • The Production Possibilities Frontier and Social Choices
  • Confronting Objections to the Economic Approach

• Demand and Supply

• • Introduction to Demand and Supply
  • Demand, Supply, and Equilibrium in Markets for Goods and Services
  • Shifts in Demand and Supply for Goods and Services
  • Changes in Equilibrium Price and Quantity: The Four-Step Process
  • Price Ceilings and Price Floors
  • Demand, Supply, and Efficiency

• Labor and Financial Markets

• • Introduction to Labor and Financial Markets
  • Demand and Supply at Work in Labor Markets
  • Demand and Supply in Financial Markets
  • The Market System as an Efficient Mechanism for Information

• Elasticity

• • Introduction to Elasticity
  • Price Elasticity of Demand and Price Elasticity of Supply
  • Polar Cases of Elasticity and Constant Elasticity
  • Elasticity and Pricing
  • Elasticity in Areas Other Than Price

• The Macroeconomic Perspective

• • Introduction to the Macroeconomic Perspective
  • Measuring the Size of the Economy: Gross Domestic Product
  • Adjusting Nominal Values to Real Values
  • Tracking Real GDP over Time
  • Comparing GDP among Countries
  • How Well GDP Measures the Well-Being of Society

• Economic Growth

• • Introduction to Economic Growth
  • The Relatively Recent Arrival of Economic Growth
  • Labor Productivity and Economic Growth
  • Components of Economic Growth
  • Economic Convergence

• Unemployment

• • Introduction to Unemployment
  • How Economists Define and Compute Unemployment Rate
  • Patterns of Unemployment
  • What Causes Changes in Unemployment over the Short Run
  • What Causes Changes in Unemployment over the Long Run

• Inflation

• • Introduction to Inflation
  • Tracking Inflation
  • How to Measure Changes in the Cost of Living
  • How the U.S. and Other Countries Experience Inflation
  • The Confusion Over Inflation
  • Indexing and Its Limitations

• The International Trade and Capital Flows

• • Introduction to the International Trade and Capital Flows
  • Measuring Trade Balances
  • Trade Balances in Historical and International Context
  • Trade Balances and Flows of Financial Capital
  • The National Saving and Investment Identity
  • The Pros and Cons of Trade Deficits and Surpluses
  • The Difference between Level of Trade and the Trade Balance

• The Aggregate Demand/Aggregate Supply Model

• • Introduction to the Aggregate Supply–Aggregate Demand Model
  • Macroeconomic Perspectives on Demand and Supply
  • Building a Model of Aggregate Demand and Aggregate Supply
  • Shifts in Aggregate Supply
  • Shifts in Aggregate Demand
  • How the AD/AS Model Incorporates Growth, Unemployment, and Inflation
  • Keynes’ Law and Say’s Law in the AD/AS Model

• The Keynesian Perspective

• • Introduction to the Keynesian Perspective
  • Aggregate Demand in Keynesian Analysis
  • The Building Blocks of Keynesian Analysis
  • The Phillips Curve
  • The Keynesian Perspective on Market Forces

• The Neoclassical Perspective

• • Introduction to the Neoclassical Perspective
  • The Building Blocks of Neoclassical Analysis
  • The Policy Implications of the Neoclassical Perspective
  • Balancing Keynesian and Neoclassical Models

• Money and Banking

• • Introduction to Money and Banking
  • Defining Money by Its Functions
  • Measuring Money: Currency, M1, and M2
  • The Role of Banks
  • How Banks Create Money

• Monetary Policy and Bank Regulation

• • Introduction to Monetary Policy and Bank Regulation
  • The Federal Reserve Banking System and Central Banks
  • Bank Regulation
  • How a Central Bank Executes Monetary Policy
  • Monetary Policy and Economic Outcomes
  • Pitfalls for Monetary Policy

• Exchange Rates and International Capital Flows

• • Introduction to Exchange Rates and International Capital Flows
  • How the Foreign Exchange Market Works
  • Demand and Supply Shifts in Foreign Exchange Markets
  • Macroeconomic Effects of Exchange Rates
  • Exchange Rate Policies

• Government Budgets and Fiscal Policy

• • Introduction to Government Budgets and Fiscal Policy
  • Government Spending
  • Taxation
  • Federal Deficits and the National Debt
  • Using Fiscal Policy to Fight Recession, Unemployment, and Inflation
  • Automatic Stabilizers
  • Practical Problems with Discretionary Fiscal Policy
  • The Question of a Balanced Budget

• The Impacts of Government Borrowing

• • Introduction to the Impacts of Government Borrowing
  • How Government Borrowing Affects Investment and the Trade Balance
  • Fiscal Policy, Investment, and Economic Growth
  • How Government Borrowing Affects Private Saving
  • Fiscal Policy and the Trade Balance

• Macroeconomic Policy Around the World

• • Introduction to Macroeconomic Policy around the World
  • The Diversity of Countries and Economies across the World
  • Improving Countries’ Standards of Living
  • Causes of Unemployment around the World
  • Causes of Inflation in Various Countries and Regions
  • Balance of Trade Concerns

• International Trade

• • Introduction to International Trade
  • Absolute and Comparative Advantage
  • What Happens When a Country Has an Absolute Advantage in All Goods
  • Intra-industry Trade between Similar Economies
  • The Benefits of Reducing Barriers to International Trade

• Globalization and Protectionism

• • Introduction to Globalization and Protectionism
  • Protectionism: An Indirect Subsidy from Consumers to Producers
  • International Trade and Its Effects on Jobs, Wages, and Working Conditions
  • Arguments in Support of Restricting Imports
  • How Governments Enact Trade Policy: Globally, Regionally, and Nationally
  • The Tradeoffs of Trade Policy
• • The Use of Mathematics in Principles of Economics
  • The Expenditure-Output Model