Economics

Cover
About The Author
Brief Contents
Detailed Contents
Preface
Part One: Introduction
	Chapter 1: What is Economics?
		Definition of Economics
		Two Big Economic Questions
			What, How, and For Whom?
			Do Choices Made in the Pursuit of Self-Interest also Promote the Social Interest?
		The Economic Way of Thinking
			A Choice is a Tradeoff
			Making a Rational Choice
			Benefit: What You Gain
			Cost: What You Must Give Up
			How Much? Choosing at the Margin
			Choices Respond to Incentives
		Economics as Social Science and Policy Tool
			Economist as Social Scientist
			Economist as Policy Adviser
		Appendix: Graphs in Economics
		Graphing Data
			Scatter Diagrams
		Graphs Used in Economic Models
			Variables That Move in the Same Direction
			Variables That Move in Opposite Directions
			Variables That Have a Maximum or a Minimum
			Variables That are Unrelated
		The Slope of a Relationship
			The Slope of a Straight Line
			The Slope of a Curved Line
		Graphing Relationships Among More than Two Variables
			Ceteris Paribus
			When Other Things Change
		Mathematical Note: Equations of Straight Lines
		At Issue
		Economics in the News
	Chapter 2: The Economic Problem
		Production Possibilities and Opportunity Cost
			Production Possibilities Frontier
			Production Efficiency
			Tradeoff Along the PPF
			Opportunity Cost
		Using Resources Efficiently
			The PPF and Marginal Cost
			Preferences and Marginal Benefit
			Allocative Efficiency
		Economic Growth
			The Cost of Economic Growth
			A Nation's Economic Growth
		Gains from Trade
			Comparative Advantage and Absolute Advantage
			Achieving the Gains from Trade
		Economic Coordination
			Firms
			Markets
			Property Rights
			Money
			Circular Flows Through Markets
			Coordinating Decisions
		Economics in Action
		Economics in the News
	Part One Wrap-Up: Understanding the Scope of Economics
		Your Economic Revolution
		Talking with Esther Duflo
Part Two: How Markets Work
	Chapter 3: Demand and Supply
		Markets and Prices
		Demand
			The Law of Demand
			Demand Curve and Demand Schedule
			A Change in Demand
			A Change in the Quantity Demanded Versus a Change in Demand
		Supply
			The Law of Supply
			Supply Curve and Supply Schedule
			A Change in Supply
			A Change in the Quantity Supplied Versus a Change in Supply
		Market Equilibrium
			Price as a Regulator
			Price Adjustments
		Predicting Changes in Price and Quantity
			An Increase in Demand
			A Decrease in Demand
			An Increase in Supply
			A Decrease in Supply
			Changes in Both Demand and Supply
		Mathematical Note: Demand, Supply, and Equilibrium
		Economics In The News
	Chapter 4: Elasticity
		Price Elasticity of Demand
			Calculating Price Elasticity of Demand
			Inelastic and Elastic Demand
			The Factors that Influence the Elasticity of Demand
			Elasticity Along a Linear Demand Curve
			Total Revenue and Elasticity
			Your Expenditure and Your Elasticity
		More Elasticities of Demand
			Income Elasticity of Demand
			Cross Elasticity of Demand
		Elasticity of Supply
			Calculating the Elasticity of Supply
			The Factors that Influence the Elasticity of Supply
		Economics in Action
		Economics in the News
	Chapter 5: Efficiency and Equity
		Resource Allocation Methods
			Market Price
			Command
			Majority Rule
			Contest
			First-Come, First-Served
			Lottery
			Personal Characteristics
			Force
		Benefit, Cost, and Surplus
			Demand, Willingness to Pay, and Value
			Individual Demand and Market Demand
			Consumer Surplus
			Supply and Marginal Cost
			Supply, Cost, and Minimum Supply-Price
			Individual Supply and Market Supply
			Producer Surplus
		Is the Competitive Market Efficient?
			Efficiency of Competitive Equilibrium
			Market Failure
			Sources of Market Failure
			Alternatives to the Market
		Is the Competitive Market Fair?
			It's Not Fair if the Result Isn't Fair
			It's Not Fair if the Rules Aren't Fair
			Case Study: A Generator Shortage in a Natural Disaster
		Economics in Action
		At Issue
		Economics in the News
	Chapter 6: Government Actions in Markets
		A Housing Market with a Rent Ceiling
			A Housing Shortage
			Increased Search Activity
			A Black Market
			Inefficiency of a Rent Ceiling
			Are Rent Ceilings Fair?
		A Labor Market with a Minimum Wage
			Minimum Wage Brings Unemployment
			Is the Minimum Wage Fair?
			Inefficiency of a Minimum Wage
		Taxes
			Tax Incidence
			A Tax on Sellers
			A Tax on Buyers
			Equivalence of Tax on Buyers and Sellers
			Tax Incidence and Elasticity of Demand
			Tax Incidence and Elasticity of Supply
			Taxes and Efficiency
			Taxes and Fairness
		Production Quotas and Subsidies
			Production Quotas
			Subsidies
		Markets for Illegal Goods
			A Free Market for a Drug
			A Market for an Illegal Drug
			Legalizing and Taxing Drugs
		Economics in Action
		At Issue
		Economics in the News
	Chapter 7: Global Markets in Action
		How Global Markets Work
			International Trade Today
			What Drives International Trade?
			Why the United States Imports T-Shirts
			Why the United States Exports Airplanes
		Winners, Losers, and the Net Gain from Trade
			Gains and Losses from Imports
			Gains and Losses from Exports
			Gains for All
		International Trade Restrictions
			Tariffs
			Import Quotas
			Other Import Barriers
			Export Subsidies
		The Case Against Protection
			Helps an Infant Industry Grow
			Counteracts Dumping
			Saves Domestic Jobs
			Allows Us to Compete with Cheap Foreign Labor
			Penalizes Lax Environmental Standards
			Prevents Rich Countries from Exploiting Developing Countries
			Reduces Offshore Outsourcing that Sends Good U.S. Jobs to Other Countries
			Avoiding Trade Wars
			Why is International Trade Restricted?
			Compensating Losers
		Economics in Action
		At Issue
		Economics in the News
	Part Two Wrap-Up: Understanding How Markets Work
		The Amazing Market
		Talking with Susan Athey
Part Three: Households' Choices
	Chapter 8: Utility and Demand
		Consumption Choices
			Consumption Possibilities
			Preferences
		Utility-Maximizing Choice
			A Spreadsheet Solution
			Choosing at the Margin
			The Power of Marginal Analysis
			Revealing Preferences
		Predictions of Marginal Utility Theory
			A Fall in the Price of a Movie
			A Rise in the Price of Soda
			A Rise in Income
			The Paradox of Value
			Temperature: An Analogy
		New Ways of Explaining Consumer Choices
			Behavioral Economics
			Neuroeconomics
			Controversy
		Economics in Action
		Economics in the News
	Chapter 9: Possibilities, Preferences, and Choices
		Consumption Possibilities
			Budget Line
			Budget Equation
		Preferences and Indifference Curves
			Marginal Rate of Substitution
			Degree of Substitutability
		Predicting Consumer Choices
			Best Affordable Choice
			A Change in Price
			A Change in Income
			Substitution Effect and Income Effect
		Economics in Action
		Economics In The News
	Part Three Wrap-Up: Understanding Households' Choices
		Making the Most of Life
		Talking with Steven D. Levitt
Part Four: Firms and Markets
	Chapter 10: Organizing Production
		The Firm and Its Economic Problem
			The Firm's Goal
			Accounting Profit
			Economic Accounting
			A Firm's Opportunity Cost of Production
			Economic Accounting: A Summary
			The Firm's Decisions
			The Firm's Constraints
		Technological and Economic Efficiency
			Technological Efficiency
			Economic Efficiency
		Information and Organization
			Command Systems
			Incentive Systems
			The Principal–Agent Problem
			Coping with the Principal–Agent Problem
			Types of Business Organization
			Pros and Cons of Different Types of Firms
		Markets and the Competitive Environment
			Measures of Concentration
			Limitations of a Concentration Measure
		Produce or Outsource? Firms and Markets
			Firm Coordination
			Market Coordination
			Why Firms?
		Economics in Action
		Economics in the News
	Chapter 11: Output and Costs
		Decision Time Frames
			The Short Run
			The Long Run
		Short-Run Technology Constraint
			Product Schedules
			Product Curves
			Total Product Curve
			Marginal Product Curve
			Average Product Curve
		Short-Run Cost
			Total Cost
			Marginal Cost
			Average Cost
			Marginal Cost and Average Cost
			Why the Average Total Cost Curve is U-Shaped
			Cost Curves and Product Curves
			Shifts in the Cost Curves
		Long-Run Cost
			The Production Function
			Short-Run Cost and Long-Run Cost
			The Long-Run Average Cost Curve
			Economies and Diseconomies of Scale
		Economics in Action
		Economics in the News
	Chapter 12: Perfect Competition
		What is Perfect Competition?
			How Perfect Competition Arises
			Price Takers
			Economic Profit and Revenue
			The Firm's Decisions
		The Firm's Output Decision
			Marginal Analysis and the Supply Decision
			Temporary Shutdown Decision
			The Firm's Supply Curve
		Output, Price, and Profit in the Short Run
			Market Supply in the Short Run
			Short-Run Equilibrium
			A Change in Demand
			Profits and Losses in the Short Run
			Three Possible Short-Run Outcomes
		Output, Price, and Profit in the Long Run
			Entry and Exit
			A Closer Look at Entry
			A Closer Look at Exit
			Long-Run Equilibrium
		Changes in Demand and Supply as Technology Advances
			An Increase in Demand
			A Decrease in Demand
			Technological Advances Change Supply
		Competition and Efficiency
			Efficient Use of Resources
			Choices, Equilibrium, and Efficiency
		Economics in Action
		Economics in the News
	Chapter 13: Monopoly
		Monopoly and How It Arises
			How Monopoly Arises
			Monopoly Price-Setting Strategies
		A Single-Price Monopoly's Output and Price Decision
			Price and Marginal Revenue
			Marginal Revenue and Elasticity
			Price and Output Decision
		Single-Price Monopoly and Competition Compared
			Comparing Price and Output
			Efficiency Comparison
			Redistribution of Surpluses
			Rent Seeking
			Rent-Seeking Equilibrium
		Price Discrimination
			Two Ways of Price Discriminating
			Increasing Profit and Producer Surplus
			A Price-Discriminating Airline
			Efficiency and Rent Seeking with Price Discrimination
		Monopoly Regulation
			Efficient Regulation of a Natural Monopoly
			Second-Best Regulation of a Natural Monopoly
		Economics in Action
		Economics in the News
	Chapter 14: Monopolistic Competition
		What is Monopolistic Competition?
			Large Number of Firms
			Product Differentiation
			Competing on Quality, Price, and Marketing
			Entry and Exit
			Examples of Monopolistic Competition
		Price and Output in Monopolistic Competition
			The Firm's Short-Run Output and Price Decision
			Profit Maximizing Might Be Loss Minimizing
			Long Run: Zero Economic Profit
			Monopolistic Competition and Perfect Competition
			Is Monopolistic Competition Efficient?
		Product Development and Marketing
			Product Development
			Advertising
			Using Advertising to Signal Quality
			Brand Names
			Efficiency of Advertising and Brand Names
		Economics in Action
		Economics in the News
	Chapter 15: Oligopoly
		What is Oligopoly?
			Barriers to Entry
			Small Number of Firms
			Examples of Oligopoly
		Oligopoly Games
			What is a Game?
			The Prisoners' Dilemma
			An Oligopoly Price-Fixing Game
			A Game of Chicken
		Repeated Games and Sequential Games
			A Repeated Duopoly Game
			A Sequential Entry Game in a Contestable Market
		Antitrust Law
			The Antitrust Laws
			Price Fixing Always Illegal
			Three Antitrust Policy Debates
			Mergers and Acquisitions
		Economics in Action
		Economics in the News
	Part Four Wrap-Up: Understanding Firms and Markets
		Managing Change and Limiting Market Power
		Talking with Thomas Hubbard
Part Five: Market Failure and Government
	Chapter 16: Public Choices, Public Goods, and Healthcare
		Public Choices
			Why Governments?
			Public Choice and the Political Marketplace
			Political Equilibrium
			What is a Public Good?
			A Fourfold Classification
			The Things Our Governments Buy
		Providing Public Goods
			The Free-Rider Problem
			Marginal Social Benefit from a Public Good
			Marginal Social Cost of a Public Good
			Efficient Quantity of a Public Good
			Inefficient Private Provision
			Efficient Public Provision
			Inefficient Public Overprovision
		The Economics of Healthcare
			Healthcare Market Failure
			Alternative Public Choice Solutions
			Vouchers a Better Solution?
		Economics in Action
		At Issue
		Economics in the News
	Chapter 17: Externalities
		Externalities In Our Lives
			Negative Production Externalities
			Positive Production Externalities
			Negative Consumption Externalities
			Positive Consumption Externalities
		Negative Externality: Pollution
			Private, External, and Social Cost
			Establish Property Rights
			Mandate Clean Technology
			Tax or Cap and Price Pollution
			Coping with Global Externalities
		Negative Externality: The Tragedy of the Commons
			Unsustainable Use of a Common Resource
			Inefficient Use of a Common Resource
			Achieving an Efficient Outcome
		Positive Externality: Knowledge
			Private Benefits and Social Benefits
			Government Actions in the Market with External Benefits
			Illustrating an Efficient Outcome
			Bureaucratic Inefficiency and Government Failure
		Economics in Action
		At Issue
		Economics in the News
	Part Five Wrap-Up: Understanding Market Failure and Government
		We, the People, ...
		Talking with Caroline M. Hoxby
Part Six: Factor Markets, Inequality, and Uncertainty
	Chapter 18: Markets for Factors of Production
		The Anatomy of Factor Markets
			Markets for Labor Services
			Markets for Capital Services
			Markets for Land Services and Natural Resources
			Entrepreneurship
		The Demand for a Factor of Production
			Value of Marginal Product
			A Firm's Demand for Labor
			A Firm's Demand for Labor Curve
			Changes in a Firm's Demand for Labor
		Labor Markets
			A Competitive Labor Market
			Differences and Trends in Wage Rates
			A Labor Market with a Union
		Capital and Natural Resource Markets
			Capital Rental Markets
			Land Rental Markets
			Nonrenewable Natural Resource Markets
		Mathematical Note: Present Value and Discounting
		Economics in Action
		At Issue
		Economics in the News
	Chapter 19: Economic Inequality
		Economic Inequality in the United States
			The Distribution of Income
			The Income Lorenz Curve
			The Distribution of Wealth
			Wealth or Income?
			Annual or Lifetime Income and Wealth?
			Trends in Inequality
			Poverty
		Inequality in the World Economy
			Income Distributions in Selected Countries
			Global Inequality and Its Trends
		The Sources of Economic Inequality
			Human Capital
			Discrimination
			Contests Among Superstars
			Unequal Wealth
		Income Redistribution
			Income Taxes
			Income Maintenance Programs
			Subsidized Services
			The Big Tradeoff
		Economics in Action
		Economics In The News
	Chapter 20: Uncertainty and Information
		Decisions in the Face of Uncertainty
			Expected Wealth
			Risk Aversion
			Utility of Wealth
			Expected Utility
			Making a Choice with Uncertainty
		Buying and Selling Risk
			Insurance Markets
			A Graphical Analysis of Insurance
			Risk That Can't Be Insured
		Private Information
			Asymmetric Information: Examples and Problems
			The Market for Used Cars
			The Market for Loans
			The Market for Insurance
		Uncertainty, Information, and the Invisible Hand
			Information as a Good
			Monopoly in Markets that Cope with Uncertainty
		Economics in Action
		Economics in the News
	Part Six Wrap-Up: Understanding Factor Markets, Inequality, and Uncertainty
		For Whom?
		Talking with Raj Chetty
Part Seven: Monitoring Macroeconomic Performance
	Chapter 21: Measuring GDP and Economic Growth
		Gross Domestic Product
			GDP Defined
			GDP and the Circular Flow of Expenditure and Income
			Why "Domestic" and Why "Gross"?
		Measuring U.S. GDP
			The Expenditure Approach
			The Income Approach
			Nominal GDP and Real GDP
			Calculating Real GDP
		The Uses and Limitations of Real GDP
			The Standard of Living Over Time
			The Standard of Living Across Countries
			Limitations of Real GDP
		Appendix: Graphs in Macroeconomics
		The Time-Series Graph
			Making a Time-Series Graph
			Reading a Time-Series Graph
			Ratio Scale Reveals Trend
			A Time-Series with a Trend
			Using a Ratio Scale
		Mathematical Note: Chained-Dollar Real GDP
		Economics in Action
		At Issue
		Economics In The News
	Chapter 22: Monitoring Jobs and Inflation
		Employment and Unemployment
			Why Unemployment is a Problem
			Current Population Survey
			Three Labor Market Indicators
			Other Definitions of Unemployment
			Most Costly Unemployment
			Alternative Measures of Unemployment
		Unemployment and Full Employment
			Frictional Unemployment
			Structural Unemployment
			Cyclical Unemployment
			"Natural" Unemployment
			Real GDP and Unemployment Over the Cycle
		The Price Level, Inflation, and Deflation
			Why Inflation and Deflation Are Problems
			The Consumer Price Index
			Reading the CPI Numbers
			Constructing the CPI
			Measuring the Inflation Rate
			Distinguishing High Inflation from a High Price Level
			The Biased CPI
			The Magnitude of the Bias
			Some Consequences of the Bias
			Alternative Price Indexes
			Core Inflation
			The Real Variables in Macroeconomics
		Economics in Action
		Economics in the News
	Part Seven Wrap-Up: Monitoring Macroeconomic Performance
		The Big Picture
		Talking with Richard Clarida
Part Eight: Macroeconomic Trends
	Chapter 23: Economic Growth
		The Basics of Economic Growth
			Calculating Growth Rates
			Economic Growth Versus Business Cycle Expansion
			The Magic of Sustained Growth
			Applying the Rule of 70
		Long-Term Growth Trends
			Long-Term Growth in the U.S. Economy
			Real GDP Growth in the World Economy
		How Potential GDP Grows
			What Determines Potential GDP?
			What Makes Potential GDP Grow?
		Why Labor Productivity Grows
			Preconditions for Labor Productivity Growth
			Physical Capital Growth
			Human Capital Growth
			Technological Advances
		Is Economic Growth Sustainable? Theories, Evidence, and Policies
			Classical Growth Theory
			Neoclassical Growth Theory
			New Growth Theory
			New Growth Theory Versus Malthusian Theory
			Sorting Out the Theories
			The Empirical Evidence on the Causes of Economic Growth
			Policies for Achieving Faster Growth
		Economics in Action
		Economics in the News
	Chapter 24: Finance, Saving, and Investment
		Financial Institutions and Financial Markets
			Finance and Money
			Capital and Financial Capital
			Capital and Investment
			Wealth and Saving
			Financial Capital Markets
			Financial Institutions
			Insolvency and Illiquidity
			Interest Rates and Asset Prices
		The Loanable Funds Market
			Funds that Finance Investment
			The Real Interest Rate
			The Demand for Loanable Funds
			The Supply of Loanable Funds
			Equilibrium in the Loanable Funds Market
			Changes in Demand and Supply
		Government in the Loanable Funds Market
			A Government Budget Surplus
			A Government Budget Deficit
		Economics in Action
		Economics in the News
	Chapter 25: Money, the Price Level, and Inflation
		What is Money?
			Medium of Exchange
			Unit of Account
			Store of Value
			Money in the United States Today
		Depository Institutions
			Types of Depository Institutions
			What Depository Institutions Do
			Economic Benefits Provided by Depository Institutions
			How Depository Institutions are Regulated
			Financial Innovation
		The Federal Reserve System
			The Structure of the Fed
			The Fed's Balance Sheet
			The Fed's Policy Tools
		How Banks Create Money
			Creating Deposits by Making Loans
			The Money Creation Process
			The Money Multiplier
		The Money Market
			The Influences on Money Holding
			The Demand for Money
			Shifts in the Demand for Money Curve
			Money Market Equilibrium
		The Quantity Theory of Money
		Mathematical Note: The Money Multiplier
		Economics in Action
		At Issue
		Economics in the News
	Chapter 26: The Exchange Rate and the Balance of Payments
		The Foreign Exchange Market
			Trading Currencies
			Exchange Rates
			Questions About the U.S. Dollar Exchange Rate
			An Exchange Rate is a Price
			The Demand for One Money is the Supply of Another Money
			Demand in the Foreign Exchange Market
			Demand Curve for U.S. Dollars
			Supply in the Foreign Exchange Market
			Supply Curve for U.S. Dollars
			Market Equilibrium
			Changes in the Demand for U.S. Dollars
			Changes in the Supply of U.S. Dollars
			Changes in the Exchange Rate
		Arbitrage, Speculation, and Market Fundamentals
			Arbitrage
			Speculation
			Market Fundamentals
		Exchange Rate Policy
			Flexible Exchange Rate
			Fixed Exchange Rate
			Crawling Peg
		Financing International Trade
			Balance of Payments Accounts
			Borrowers and Lenders
			The Global Loanable Funds Market
			Debtors and Creditors
			Is U.S. Borrowing for Consumption?
			Current Account Balance
			Net Exports
			Where is the Exchange Rate?
		Economics in Action
		Economics in the News
	Part Eight Wrap-Up: Understanding Macroeconomic Trends
		Expanding the Frontier
		Talking with Xavier Sala-i-Martin
Part Nine: Macroeconomic Fluctuations
	Chapter 27: Aggregate Supply and Aggregate Demand
		Aggregate Supply
			Quantity Supplied and Supply
			Long-Run Aggregate Supply
			Short-Run Aggregate Supply
			Changes in Aggregate Supply
		Aggregate Demand
			The Aggregate Demand Curve
			Changes in Aggregate Demand
		Explaining Macroeconomic Trends and Fluctuations
			Short-Run Macroeconomic Equilibrium
			Long-Run Macroeconomic Equilibrium
			Economic Growth and Inflation in the AS-AD Model
			The Business Cycle in the AS-AD Model
			Fluctuations in Aggregate Demand
			Fluctuations in Aggregate Supply
		Macroeconomic Schools of Thought
			The Classical View
			The Keynesian View
			The Monetarist View
			The Way Ahead
		Economics in Action
		Economics in the News
	Chapter 28: Expenditure Multipliers
		Fixed Prices and Expenditure Plans
			Expenditure Plans
			Consumption and Saving Plans
			Marginal Propensities to Consume and Save
			Slopes and Marginal Propensities
			Consumption as a Function of Real GDP
			Import Function
		Real GDP with a Fixed Price Level
			Aggregate Planned Expenditure
			Actual Expenditure, Planned Expenditure, and Real GDP
			Equilibrium Expenditure
			Convergence to Equilibrium
		The Multiplier
			The Basic Idea of the Multiplier
			The Multiplier Effect
			Why is the Multiplier Greater Than 1?
			The Size of the Multiplier
			The Multiplier and the Slope of the AE Curve
			Imports and Income Taxes
			The Multiplier Process
			Business Cycle Turning Points
		The Multiplier and the Price Level
			Adjusting Quantities and Prices
			Aggregate Expenditure and Aggregate Demand
			Deriving the Aggregate Demand Curve
			Changes in Aggregate Expenditure and Aggregate Demand
			Equilibrium Real GDP and the Price Level
		Mathematical Note: The Algebra of the Keynesian Model
		Economics in Action
		Economics in the News
	Chapter 29: The Business Cycle, Inflation, and Deflation
		The Business Cycle
			Mainstream Business Cycle Theory
			Real Business Cycle Theory
		Inflation Cycles
			Demand-Pull Inflation
			Cost-Push Inflation
			Expected Inflation
			Forecasting Inflation
			Inflation and the Business Cycle
		Deflation
			What Causes Deflation?
			What are the Consequences of Deflation?
			How Can Deflation be Ended?
		The Phillips Curve
			The Short-Run Phillips Curve
			The Long-Run Phillips Curve
		Economics in Action
		Economics in the News
	Part Nine Wrap-Up: Understanding Macroeconomic Fluctuations
		Boom and Bust
		Talking with Ricardo J. Caballero
Part Ten: Macroeconomic Policy
	Chapter 30: Fiscal Policy
		The Federal Budget
			The Institutions and Laws
			Highlights of the 2015 Budget
			The Budget in Historical Perspective
			Budget Balance and Debt
			State and Local Budgets
		Supply-Side Effects of Fiscal Policy
			Full Employment and Potential GDP
			The Effects of the Income Tax
			Taxes on Expenditure and the Tax Wedge
			Taxes and the Incentive to Save and Invest
			Tax Revenues and the Laffer Curve
			The Supply-Side Debate
		Generational Effects of Fiscal Policy
			Generational Accounting and Present Value
			The Social Security Time Bomb
			Generational Imbalance
			International Debt
		Fiscal Stimulus
			Automatic Fiscal Policy and Cyclical and Structural Budget Balances
			Discretionary Fiscal Stimulus
		Economics in Action
		At Issue
		Economics in the News
	Chapter 31: Monetary Policy
		Monetary Policy Objectives and Framework
			Monetary Policy Objectives
			Operational "Stable Prices" Goal
			Operational "Maximum Employment" Goal
			Responsibility for Monetary Policy
		The Conduct of Monetary Policy
			The Monetary Policy Instrument
			The Fed's Decision-Making Strategy
		Monetary Policy Transmission
			Quick Overview
			Interest Rate Changes
			Exchange Rate Fluctuations
			Money and Bank Loans
			The Long-Term Real Interest Rate
			Expenditure Plans
			The Change in Aggregate Demand, Real GDP, and the Price Level
			The Fed Fights Recession
			The Fed Fights Inflation
			Loose Links and Long and Variable Lags
		Extraordinary Monetary Stimulus
			The Key Elements of the Crisis
			The Policy Actions
			Persistently Slow Recovery
			Policy Strategies and Clarity
		Economics in Action
		At Issue
		Economics in the News
	Part Ten Wrap-Up: Understanding Macroeconomic Policy
		Tradeoffs and Free Lunches
		Talking with Stephanie Schmitt-Grohe
Glossary
Index
Credits