The Economy Today

Title
Contents
PART 1: THE ECONOMIC CHALLENGE
	CHAPTER 1: ECONOMICS: THE CORE ISSUES
		The Economy Is Us
		Scarcity: The Core Problem
		Production Possibilities
		Economic Growth
		Basic Decisions
		The Mechanisms of Choice
		What Economics Is All About
		Summary
		Appendix: Using Graphs
		THE ECONOMY TOMORROW: The Journey to Mars
		IN THE NEWS U.S. Jobless Rate at Highest Level Since ’93
		WORLD VIEW Chronic Food Shortage Shows Despite Efforts by N. Korea to Hide It
		Rocket Launch Cost Enough to End Famine in North Korea for a Year
		Market Reliance vs. Government Reliance?
		Index of Economic Freedom
	CHAPTER 2: THE U.S. ECONOMY: A GLOBAL VIEW
		What America Produces
		How America Produces
		For Whom America Produces
		Summary
		THE ECONOMY TOMORROW: Ending Global Poverty
		WORLD VIEW Comparative Output (GDP)
		GDP Per Capita around the World
		The Education Gap between Rich and Poor Nations
		Income Share of the Rich
	CHAPTER 3: SUPPLY AND DEMAND
		Market Participants
		The Circular Flow
		Demand
		Supply
		Equilibrium
		Market Outcomes
		Summary
		THE ECONOMY TOMORROW: Deadly Shortages: The Organ-Transplant Market
		IN THE NEWS Auto Makers Return to Deep Discounts
		Another Storm Casualty: Oil Prices
		Historic Inauguration Could Lead to Ticket Scalping
		Are Kidneys a Commodity?
		WORLD VIEW Dining on the Downtick
	CHAPTER 4: THE ROLE OF GOVERNMENT
		Market Failure
		Growth of Government
		Taxation
		Government Failure
		Summary
		THE ECONOMY TOMORROW: Downsizing Government?
		IN THE NEWS Paying for Tunes
		U.S. Details Dangers of Secondhand Smoking
		Perpetuating Poverty: Lotteries Prey on the Poor
		Persistent Doubts about Government Waste
		Little Confidence in Government
PART 2: MEASURING MACRO OUTCOMES
	CHAPTER 5: NATIONAL-INCOME ACCOUNTING
		Measures of Output
		The Uses of Output
		Measures of Income
		The Flow of Income
		Summary
		THE ECONOMY TOMORROW : The Quality of Life
		IN THE NEWS A Lot Going On under the Table
		Material Wealth vs. Social Health
		WORLD VIEW Global Inequalities
	CHAPTER 6: UNEMPLOYMENT
		The Labor Force
		Measuring Unemployment
		The Human Costs
		Defining Full Employment
		The Historical Record
		Summary
		THE ECONOMY TOMORROW: Outsourcing Jobs
		IN THE NEWS Unemployment Benefits Not for Everyone
		How Unemployment Affects the Family
		Job Loss: Worst in 34 Years
		Outsourcing May Create U.S. Jobs
		WORLD VIEW Europe’s Unemployment Woes
		Salary Gap
	CHAPTER 7: INFLATION
		What Is Inflation?
		Redistributive Effects of Inflation
		Macro Consequences
		Measuring Inflation
		The Goal: Price Stability
		The Historical Record
		Causes of Inflation
		Protective Mechanisms
		Summary
		THE ECONOMY TOMORROW: The End of Inflation?
		IN THE NEWS College Tuition Just Keeps Climbing
		Ignoring Cell Phones Biases CPI Upward
		WORLD VIEW Zimbabwe Introduces $50 Billion Note
PART 3: CYCLICAL INSTABILITY
	CHAPTER 8: THE BUSINESS CYCLE
		Stable or Unstable?
		Historical Cycles
		A Model of the Macro Economy
		Aggregate Demand and Supply
		Competing Theories of Short-Run Instability
		Long-Run Self-Adjustment
		Summary
		THE ECONOMY TOMORROW: Coping with Recession: 2008–9
		IN THE NEWS Market in Panic As Stocks Are Dumped in 12,894,600 Share Day; Bankers Halt It
		Economy Shrank Last Quarter
		WORLD VIEW Global Depression
	CHAPTER 9: AGGREGATE DEMAND
		Macro Equilibrium
		Consumption
		The Consumption Function
		Investment
		Government and Net Export Spending
		Macro Failure
		Summary
		Appendix: The Keynesian Cross
		THE ECONOMY TOMORROW: Anticipating AD Shifts
		IN THE NEWS Livin’ Large
		News Release: Personal Income and Outlays
		Consumer Confidence Index at All-Time Low
		WORLD VIEW Panasonic Slashes Spending
	CHAPTER 10: SELF-ADJUSTMENT OR INSTABILITY?
		Leakages and Injections
		The Multiplier Process
		Macro Equilibrium Revisited
		Adjustment to an Inflationary GDP Gap
		Summary
		THE ECONOMY TOMORROW: Maintaining Consumer Confidence
		IN THE NEWS Deflation
		Consumer Spending Drops 1%
		Job Losses Surge As U.S. Downturn Accelerates
		Hard-Hit Families Finally Start Saving, Aggravating Nation’s Economic Woes
		WORLD VIEW Crisis in Europe and U.S. Hurts Asian Economies
PART 4: FISCAL POLICY TOOLS
	CHAPTER 11: FISCAL POLICY
		Taxes and Spending
		Fiscal Stimulus
		Fiscal Restraint
		Fiscal Guidelines
		Summary
		THE ECONOMY TOMORROW: The Concern for Content
		IN THE NEWS $787b Stimulus Bill Approved
		Just How Stimulating Are Those Checks?
		Economy Is Already Feeling the Impact of Federal Government’s Spending Cuts
		WORLD VIEW China Sets Big Stimulus Plan in Bid to Jump-Start Growth
	CHAPTER 12: DEFICITS AND DEBT
		Budget Effects of Fiscal Policy
		Economic Effects of Deficits
		Economic Effects of Surpluses
		The Accumulation of Debt
		Who Owns the Debt?
		Burden of the Debt
		External Debt
		Deficit and Debt Limits
		Summary
		THE ECONOMY TOMORROW: Dipping into Social Security
		IN THE NEWS Deficit Projected to Swell beyond Earlier Estimates
		Fiscal Policy in the Great Depression
		WORLD VIEW Budget Imbalances Common
PART 5: MONETARY POLICY OPTIONS
	CHAPTER 13: MONEY AND BANKS
		What Is “Money”?
		The Money Supply
		Creation of Money
		The Money Multiplier
		Banks and the Circular Flow
		Summary
		THE ECONOMY TOMORROW: When Banks Fail
		IN THE NEWS WaMu’s Failure Biggest in US Bank History
		WORLD VIEW The Cashless Society
	CHAPTER 14: THE FEDERAL RESERVE SYSTEM
		Structure of the Fed
		Monetary Tools
		Increasing the Money Supply
		Decreasing the Money Supply
		Summary
		THE ECONOMY TOMORROW: Is the Fed Losing Control?
		IN THE NEWS Fed Cuts Deposit-Reserve Requirements
		Treasury Prices Fall As Refunding Weighs
		U.S. Federal Reserve Cuts Interest Rates to Historic Low
		WORLD VIEW China Lifts Bank Reserves in Bid to Cool Growth
		Fighting Terror/Targeting Funds; Laws May Not Stop Flow of Terror Funds
	CHAPTER 15: MONETARY POLICY
		The Money Market
		Interest Rates and Spending
		Policy Constraints
		The Monetarist Perspective
		The Concern for Content
		Summary
		THE ECONOMY TOMORROW: Which Lever to Pull?
		IN THE NEWS Fed Cut Means Lower Rates for Consumers
		More People Refinance to Wring Cash Out of Their Homes
		Fed Shifts Focus from Job Growth to Rising Prices
		Lending Drops at Big U.S. Banks
		Consumer Borrowing Dips More than Expected in Feb.
		Lag Time Is a Variable to Watch in Fed Rate Cut
		“Not Worth a Continental”: The U.S. Experience with Hyperinflation
		WORLD VIEW Rising Rates Haven’t Thwarted Consumers
PART 6: SUPPLY-SIDE OPTIONS
	CHAPTER 16: SUPPLY-SIDE POLICY: SHORT-RUN OPTIONS
		Aggregate Supply
		Shape of the AS Curve
		Shifts of the AS Curve
		Tax Incentives
		Human Capital Investment
		Deregulation
		Easing Trade Barriers
		Infrastructure Development
		Expectations
		Summary
		THE ECONOMY TOMORROW: Rebuilding America
		IN THE NEWS The Misery Index
		Hurricane Damage to Gulf Ports Delays Deliveries, Raises Costs
		Can Infrastructure Spending Rev Up the Economy?
		CHAPTER 17: GROWTH AND PRODUCTIVITY: LONG-RUN POSSIBILITIES
		The Nature of Growth
		Measures of Growth
		Sources of Growth
		Policy Tools
		Summary
		THE ECONOMY TOMORROW: Limitless Growth?
		IN THE NEWS The New Economy
		Intel Reveals Major Chip-Design Advance
		WORLD VIEW High Investment 5 Fast Growth
		U.S. Workers Compete Well
PART 7: POLICY CONSTRAINTS
	CHAPTER 18: THEORY VERSUS REALITY
		Policy Tools
		Idealized Uses
		The Economic Record
		Why Things Don’t Always Work
		Summary
		THE ECONOMY TOMORROW: Hands On or Hands Off?
		IN THE NEWS Deficit-Cutting Wilts in Heat from Voters
		The Recession Is Finally Declared Officially Over
		No Recession, Bernanke Says
		CBO’s Flawed Forecasts
		Stimulus: Spend or Cut Taxes?
		Lobbyists Flock As Businesses Seek Share of Stimulus Pie
		WORLD VIEW Comparative Macro Performance
PART 8: PRODUCT MARKETS: THE BASICS
	CHAPTER 19: CONSUMER DEMAND
		Determinants of Demand
		The Demand Curve
		Price Elasticity
		Price Elasticity and Total Revenue
		Other Elasticities
		Choosing among Products
		Summary
		Appendix: Indifference Curves
		THE ECONOMY TOMORROW: Caveat Emptor
		IN THE NEWS Men vs. Women: How They Spend
		Federal Cigarette Tax Going Up
		PlayStation 3 Sales More Than Double after Price Cut
		Professor Becker Corrects President’s Math
		Many Lottery Sales Up during Recession
		Downloads Displacing CDs
		Win or Lose, LeBron’s Star is Soaring
		WORLD VIEW Where the Pitch Is Loudest
	CHAPTER 20: THE COSTS OF PRODUCTION
		The Production Function
		Marginal Productivity
		Resource Costs
		Dollar Costs
		Economic vs. Accounting Costs
		Long-Run Costs
		Economies of Scale
		Summary
		THE ECONOMY TOMORROW: Global Competitiveness
		IN THE NEWS Funeral Giant Moves In on Small Rivals
		WORLD VIEW Intel to Build Factory in China
		United States Gains Cost Advantage
PART 9: MARKET STRUCTURE
	CHAPTER 21: THE COMPETITIVE FIRM
		The Profit Motive
		Economic vs. Accounting Profits
		Market Structure
		The Nature of Perfect Competition
		The Production Decision
		Profit-Maximizing Rule
		The Shutdown Decision
		The Investment Decision
		Determinants of Supply
		Summary
		THE ECONOMY TOMORROW: Internet-Based Price Competition
		IN THE NEWS Are Profits Bad?
		Strawberry Fields Forever?
		T-Shirt Shop Owner’s Lament: Too Many T-Shirt Shops
		Southern Farmers Hooked on New Cash Crop
		GM to Close 15 Plants for 9 Weeks
		Dell Plans to Close Plant in Texas
	CHAPTER 22: COMPETITIVE MARKETS
		The Market Supply Curve
		Competition at Work: Microcomputers
		The Competitive Process
		Summary
		THE ECONOMY TOMORROW: $29 iPods; $99 iPhones?
		IN THE NEWS IBM to Halt PCjr Output Next Month
		Attack of the iPod Clones
		WORLD VIEW Economy Threatens Catfish Industry
		Flat Panels, Thin Margins
		Wireless-Phone Rates in India Declining As Competition Grows
	CHAPTER 23: MONOPOLY
		Market Power
		Market Power at Work: The Computer Market Revisited
		A Comparative Perspective of Market Power
		Pros and Cons of Market Power
		Summary
		THE ECONOMY TOMORROW: Microsoft: Bully or Genius?
		IN THE NEWS Ticketmaster—Live Nation: A Sour Note
		U.S. Sues over Drug’s Price Hike
		Jury Rules Magnetek Unit Is Liable for Keeping Technology off Market
		Rocket Monopoly Approved
		XM-Sirius Merger Made Simple: One Is Always Less than Two
		Judge Says Microsoft Broke Antitrust Law
		WORLD VIEW Foxy Soviets Pelt the West
		New Competition May Mean Bad News for CNN
	CHAPTER 24: OLIGOPOLY
		Market Structure
		Oligopoly Behavior
		The Kinked Demand Curve
		Game Theory
		Oligopoly vs. Competition
		Coordination Problems
		Barriers to Entry
		Summary
		THE ECONOMY TOMORROW: Antitrust Enforcement
		IN THE NEWS Pop Culture: RC Goes for the Youth Market
		Major Airlines Match Southwest’s Fare Cuts
		Major U.S. Airlines Struggle to Stick to Latest Fare Increases
		Coke and Pepsi May Call Off Pricing Battle
		Eliminating the Competition
		Frito-Lay Devours Snack-Food Business
		WORLD VIEW Putting Size in Global Perspective
		Oil Cartel Achieves Cuts in Output, Halting Price Slide
	CHAPTER 25: MONOPOLISTIC COMPETITION
		Structure
		Behavior
		Summary
		THE ECONOMY TOMORROW: No Cease-Fire in Advertising Wars
		IN THE NEWS What’s Behind Starbucks’ Price Hike?
		Water, Water Everywhere; Coke, Pepsi Unleash Flood of Ad Muscle
		Fast-Food Rivals Suit Up for Breakfast War
		Premium Coffee Shops May Be Nearing Saturation Point
		The Cola Wars: It’s Not All Taste
		WORLD VIEW The Best Global Brands
PART 10: REGULATORY ISSUES
	CHAPTER 26: (DE)REGULATION OF BUSINESS
		Antitrust vs. Regulation
		Natural Monopoly
		Regulatory Options
		The Costs of Regulation
		Deregulation in Practice
		Summary
		THE ECONOMY TOMORROW: Deregulate Everything?
		IN THE NEWS Costs of Trucking Seen Rising under New Safety Rules
		Bell Monopolies Push to Disconnect Competition
		Virgin Puts Off Chicago Route—No Gate Space
		The JetBlue Effect
		Financial Woes Heating Up
	CHAPTER 27: ENVIRONMENTAL PROTECTION
		The Environmental Threat
		Pollution Damages
		Market Incentives
		Market Failure: External Costs
		Regulatory Options
		Balancing Benefits and Costs
		Summary
		THE ECONOMY TOMORROW: The Greenhouse Threat
		IN THE NEWS Kaua’i Beach among Most Polluted
		Dirty Air Can Shorten Your Life
		Study Finds Net Gain from Pollution Rules
		Forced Recycling Is a Waste
		WORLD VIEW Polluted Cities
		Guess Who Taxes Pollution Least?
		Paying to Pollute
		Evidence Is Now “Unequivocal” That Humans Are Causing Global Warming
	CHAPTER 28: THE FARM PROBLEM
		Destabilizing Forces
		The First Farm Depression, 1920–1940
		U.S. Farm Policy
		The Second Farm Depression, 1980–1986
		Summary
		THE ECONOMY TOMORROW: Farmers on the Dole
		IN THE NEWS Corn Acres Expected to Soar in 2007, USDA Says Ethanol, Export Demand Lead to Largest Planted Area in 63 Years
		Obama Reignites Fight over U.S. Farm Subsidies
		WORLD VIEW EU Farm Subsidies
PART 11: FACTOR MARKETS: BASIC THEORY
	CHAPTER 29: THE LABOR MARKET
		Labor Supply
		Market Supply
		Labor Demand
		A Firm’s Hiring Decision
		Market Equilibrium
		Choosing among Inputs
		Summary
		THE ECONOMY TOMORROW: Capping CEO Pay
		IN THE NEWS Job Fairs: Long Lines and a Ray of Hope
		Challenging Work and Corporate Responsibility Will Lure MBA Grads
		Manny Is In The Money
		Obama Wants $9.50 Minimum Wage
		Obama Talks Tough on CEO Pay
		WORLD VIEW Your Money or Your Life
	CHAPTER 30: LABOR UNIONS
		The Labor Market
		Labor Unions
		The Potential Use of Power
		The Extent of Union Power
		Employer Power
		Collective Bargaining
		The Impact of Unions
		Summary
		THE ECONOMY TOMORROW: Merging to Survive
		IN THE NEWS The GM-UAW Deal
		A Win for the Graduate(s)
		Free Agents in Sports: A Threat to Monopsony
		Caterpillar vs. the UAW
		WORLD VIEW Union Membership
	CHAPTER 31: FINANCIAL MARKETS
		The Role of Financial Markets
		The Present Value of Future Profits
		The Stock Market
		The Bond Market
		Summary
		THE ECONOMY TOMORROW: Venture Capitalists—Financing Tomorrow’s Products
		IN THE NEWS Google Growth Slows Dramatically in 1Q
		Where Do Start-Ups Get Their Money?
PART 12: DISTRIBUTIONAL ISSUES
	CHAPTER 32: TAXES: EQUITY VERSUS EFFICIENCY
		What Is Income ?
		The Size Distribution of Income
		The Federal Income Tax
		Payroll, State, and Local Taxes
		Taxes and Inequality
		What Is Fair ?
		Summary
		THE ECONOMY TOMORROW: A Flat Tax?
		IN THE NEWS The Obamas’ Taxes
		WORLD VIEW U2 Avoids Taxes, Raising Ire in Ireland
		Top Tax Rates
		CHAPTER 33: TRANSFER PAYMENTS: WELFARE AND SOCIAL SECURITY
		Major Transfer Programs
		Welfare Programs
		Social Security
		Summary
		THE ECONOMY TOMORROW: Privatize Social Security?
PART 13: INTERNATIONAL ECONOMICS
	CHAPTER 34: INTERNATIONAL TRADE
		U.S. Trade Patterns
		Motivation to Trade
		Pursuit of Comparative Advantage
		Terms of Trade
		Protectionist Pressures
		Barriers to Trade
		Summary
		THE ECONOMY TOMORROW: An Increasingly Global Market
		IN THE NEWS California Grape Growers Protest Mixing Foreign Wine
		Some See Bush Sheltering Sugar for Votes
		NAFTA Reallocates Labor: Comparative Advantage at Work
		WORLD VIEW Export Ratios
		China Accuses Corning of “Dumping”
		Meat Imports “Threaten” Farmers
		“Beggar-Thy-Neighbor” Policies in the 1930s
		Mexico Retaliates for Loss of Truck Program
	CHAPTER 35: INTERNATIONAL FINANCE
		Exchange Rates: The Global Link
		Foreign-Exchange Markets
		Market Dynamics
		Resistance to Exchange-Rate Changes
		Exchange-Rate Intervention
		Summary
		THE ECONOMY TOMORROW: Currency Bailouts
		WORLD VIEW Foreign-Exchange Rates
		Weak Dollar Helps U.S. Firms
		Dollar’s Fall Puts Big Crimp in European Tourism
		Nobel Prize Was Nobler in October
		Foreign Currency Piles Up in China
	CHAPTER 36: GLOBAL POVERTY
		American Poverty
		Global Poverty
		Goals and Strategies
		Income Redistribution
		Economic Growth
		Summary
		THE ECONOMY TOMORROW: Unleashing Entrepreneurship
		WORLD VIEW Glaring Inequalities
		The Way We Give
		The Female “Inequality Trap”
		Dying for a Drink of Clean Water
		Muhammad Yunus: Microloans
		Jeffrey Sachs: Big Money, Big Plans
		Chávez Sets Plans for Nationalization
		African Sugar Production Ramps Up
Glossary
Index