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• Half Title
• Title Page
• Copyright
• Dedication
• About the Authors
• Brief Contents
• Contents
• Preface
• Acknowledgments
• Global Edition Acknowledgments
• Part I: Introduction to Economics
• Chapter 1: The Principles and Practice of Economics
• 1.1 The Scope of Economics
• Economic Agents and Economic Resources
• Definition of Economics
• Positive Economics and Normative Economics
• Microeconomics and Macroeconom
• 1.2 Three Principles of Economics
• 1.3 The First Principle of Economics: Optimization
• Trade-offs and Budget Constraints
• Opportunity Cost
• Cost-Benefit Analysis
• Evidence-Based Economics: Is Facebook free?
• 1.4 The Second Principle of Economics: Equilibrium
• The Free-Rider Problem
• 1.5 The Third Principle of Economics: Empiricism
• 1.6 Is Economics Good for You?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 2: Economic Science: Using Data and Models to Understand the World
• 2.1 The Scientific Method
• Models and Data
• An Economic Model
• Evidence-Based Economics: How much moredoes a worker with a 4-year college degree earn compared to a
• Means and Medians
• Argument by Anecdote
• 2.2 Causation and Correlation
• The Red Ad Blues
• Causation Versus Correlation
• Choice & Consequence: Spend Now and Pay Later?
• Experimental Economics and Natural Experiments
• Evidence-Based Economics: What is the return to education?
• 2.3 Economic Questions and Answers
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Appendix: Constructing and Interpreting Charts and Graphs
• A Study about Incentives
• Experimental Design
• Describing Variables
• Cause and Effect
• Appendix Key Terms
• Appendix Problems
• Chapter 3: Optimization: Trying to Do the Best You Can
• 3.1 Optimization: Trying to Choose the Best Feasible Option
• Choice & Consequence: Do People Actually Choose the Best Feasible Option?
• 3.2 Optimization Application: Renting the Optimal Apartment
• Before and After Comparisons
• 3.3 Optimization Using Marginal Analysis
• Marginal Cost
• Evidence-Based Economics: How does location affect the rental cost of housing?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 4: Demand, Supply, and Equilibrium
• 4.1 Markets
• Competitive Markets
• 4.2 How Do Buyers Behave?
• Demand Curves
• Willingness to Pay
• From Individual Demand Curves to Aggregated Demand Curves
• Building the Market Demand Curve
• Shifting the Demand Curve
• Evidence-Based Economics: How much more gasoline would people buy if its price were lower?
• 4.3 How Do Sellers Behave?
• Supply Curves
• Willingness to Accept
• From the Individual Supply Curve to the Market Supply Curve
• Shifting the Supply Curve
• 4.4 Supply and Demand in Equilibrium
• Curve Shifting in Competitive Equilibrium
• Letting the Data Speak: Technological Breakthroughs Drive Down the Equilibrium Price of Oil
• Letting the Data Speak: The Day Oil Became Garbage
• 4.5 What Would Happen If the Government Tried to Dictate the Price of Gasoline?
• Choice & Consequence: The Unintended Consequences of Fixing Market Prices
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Part II: Foundations of Microeconomics
• Chapter 5: Consumers and Incentives
• 5.1 The Buyer’s Problem
• What You Like
• Prices of Goods and Services
• How Much Money You Have to Spend
• Choice & Consequence: Absolutes Versus Percentages
• 5.2 Putting It All Together
• Price Changes
• Letting the Data Speak: Does $6 + $1 Always = $7?
• Income Changes
• 5.3 From the Buyer’s Problem to the Demand Curve
• 5.4 Consumer Surplus
• An Empty Feeling: Loss in Consumer Surplus When Price Increases
• Evidence-Based Economics: Would a smoker quit the habit for $100 per month?
• 5.5 Demand Elasticities
• The Price Elasticity of Demand
• The Cross-Price Elasticity of Demand
• The Income Elasticity of Demand
• Letting the Data Speak: Should McDonald’s Be Interested in Elasticities?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Appendix: Representing Preferences with Indifference Curves: Another Use of the Budget Constraint
• Appendix Questions
• Appendix Key Terms
• Chapter 6: Sellers and Incentives
• 6.1 Sellers in a Perfectly Competitive Market
• 6.2 The Seller’s Problem
• Making the Goods: How Inputs Are Turned into Outputs
• The Cost of Doing Business: Introducing Cost Curves
• The Rewards of Doing Business: Introducing Revenue Curves
• Putting It All Together: Using the Three Components to Do the Best You Can
• Choice & Consequence: Maximizing Total Profit, Not Per-Unit Profit
• 6.3 From the Seller’s Problem to the Supply Curve
• Price Elasticity of Supply
• Shutdown
• Choice & Consequence: Marginal Decision Makers Ignore Sunk Costs
• 6.4 Producer Surplus
• 6.5 From the Short Run to the Long Run
• Long-Run Supply Curve
• Choice & Consequence: Visiting a Car Manufacturing Plant
• 6.6 From the Firm to the Market: Long-Run Competitive Equilibrium
• Firm Entry
• Firm Exit
• Zero Profits in the Long Run
• Economic Profit Versus Accounting Profit
• Letting the Data Speak: The Effect of Uber Driver Entry in the Long Run
• Evidence-Based Economics: How would an ethanol subsidy affect ethanol producers?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Appendix: When Firms Have Different Cost Structures
• Chapter 7: Perfect Competition and the Invisible Hand
• 7.1 Perfect Competition and Efficiency
• Social Surplus
• Pareto Efficiency
• 7.2 Extending the Reach of the Invisible Hand: From the Individual to the Firm
• 7.3 Extending the Reach of the Invisible Hand: Allocation of Resources Across Industries
• Letting the Data Speak: Adam Smith Visitsthe White House
• 7.4 Prices Guide the Invisible Hand
• Deadweight Loss
• Evidence-Based Economics: Do companies like Uber make use of the invisible hand?
• The Command Economy
• Choice & Consequence: FEMA and Walmart After Katrina
• The Central Planner
• Choice & Consequence: Command and Control at Kmart
• 7.5 Equity and Efficiency
• Evidence-Based Economics: Can markets composed of only self-interested people maximizethe overall we
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 8: Trade
• 8.1 The Production Possibilities Curve
• Calculating Opportunity Cost
• 8.2 The Basis for Trade: Comparative Advantage
• Specialization
• Absolute Advantage
• Choice & Consequence: An Experiment on Comparative Advantage
• The Price of the Trade
• 8.3 Trade Between States
• Choice & Consequence: Should LeBron James Paint His Own House?
• Economy-Wide PPC
• Comparative Advantage and Specialization Among States
• 8.4 Trade Between Countries
• Determinants of Trade Between Countries
• Exporting Nations: Winners and Losers
• Letting the Data Speak: Fair Trade Products
• Importing Nations: Winners and Losers
• Where Do World Prices Come From?
• Determinants of a Country’s Comparative Advantage
• 8.5 Arguments Against Free Trade
• National Security Concerns
• Fear of Globalization
• Environmental and Resource Concerns
• Infant Industry Arguments
• The Effects of Tariffs
• Choice & Consequence: Tariffs Affect Trade Between Firms
• Evidence-Based Economics: Will free trade cause you to lose your job?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 9: Externalities and Public Goods
• 9.1 Externalities
• A “Broken” Invisible Hand: Negative Externalities
• A “Broken” Invisible Hand: Positive Externalities
• Pecuniary Externalities
• Choice & Consequence: Coronavirus Vaccination: Positive Externalities in Spots You Never Imagined
• 9.2 Private Solutions to Externalities
• Private Solution: Bargaining
• The Coase Theorem
• Private Solution: Doing the Right Thing
• 9.3 Government Solutions to Externalities
• Government Regulation: Command-and-Control Policies
• Evidence-Based Economics: How did the government lower the number of earthquakes in Oklahoma?
• Government Regulation: Market-Based Approaches
• Corrective Taxes
• Corrective Subsidies
• Letting the Data Speak: How to Value Externalities
• Letting the Data Speak: Pay as You Throw: Consumers Create Negative Externalities Too!
• 9.4 Public Goods
• Government Provision of Public Goods
• Choice & Consequence: The Free-Rider’s Dilemma
• Private Provision of Public Goods
• 9.5 Common Pool Resource Goods
• Choice & Consequence: Tragedy of the Commons
• Choice & Consequence: The Race to Fish
• Evidence-Based Economics: How can the Queen of England lower her commute time to Wembley Stadium?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 10: The Government in the Economy: Taxation and Regulation
• 10.1 Taxation and Government Spending in the United States
• Where Does the Money Come From?
• Why Does the Government Tax and Spend?
• Choice & Consequence: The Government Budget Constraint
• Letting the Data Speak: Understanding Federal Income Tax Brackets
• Letting the Data Speak: Reducing Inequality the Scandinavian Way
• Taxation: Tax Incidence and Deadweight Losses
• Choice & Consequence: The Deadweight Loss Depends on the Tax
• 10.2 Regulation
• Direct Regulation
• 10.3 Government Failures
• The Direct Costs of Bureaucracies
• Corruption
• Underground Economy
• Choice & Consequence: Can Market Regulation Save Rhinos from Extinction?
• 10.4 Equity Versus Efficiency
• 10.5 Consumer Sovereignty and Paternalism
• The Debate
• Evidence-Based Economics: What is the optimal size of government?
• Letting the Data Speak: The Efficiency of Government Versus Privately Run Expeditions
• Choice & Consequence: Taxation and Innovation
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 11: Markets for Factors of Production
• 11.1 The Competitive Labor Market
• The Demand for Labor
• 11.2 The Supply of Labor: Your Labor-Leisure Trade-Off
• Labor Market Equilibrium: Supply Meets Demand
• Labor Demand Shifters
• Choice & Consequence: Producing Web Sites and Computer Programs
• Letting the Data Speak: “Get Your Hot Dogs Here!”
• Factors That Shift Labor Supply
• Letting the Data Speak: Do Wages Really Go Down If Labor Supply Increases?
• 11.3 Wage Inequality
• Differences in Human Capital
• Differences in Compensating Wage Differentials
• Choice & Consequence: Paying for Worker Training
• Discrimination in the Job Market
• Changes in Wage Inequality over Time
• Choice & Consequence: Compensating Wage Differentials
• Letting the Data Speak: Broadband andInequality
• 11.4 The Market for Other Factors of Production: Physical Capital and Land
• Letting the Data Speak: The Top 1 Percent Share and Capital Income
• Evidence-Based Economics: Is there discrimination in the labor market?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Appendix: Monopsony in the Labor Market
• Part III: Market Structure
• Chapter 12: Monopoly
• 12.1 Introducing a New Market Structure
• 12.2 Sources of Market Power
• Legal Market Power
• Natural Market Power
• Control of Key Resources
• Choice & Consequence: Barriers to Entry Lurk Everywhere
• Economies of Scale
• 12.3 The Monopolist’s Problem
• Revenue Curves
• Price, Marginal Revenue, and Total Revenue
• 12.4 Choosing the Optimal Quantity and Price
• Producing the Optimal Quantity
• Setting the Optimal Price
• How a Monopolist Calculates Profits
• Does a Monopoly Have a Supply Curve?
• 12.5 The “Broken” Invisible Hand: The Cost of Monopoly
• 12.6 Restoring Efficiency
• Three Degrees of Price Discrimination
• Letting the Data Speak: Third-Degree Price Discrimination in Action
• 12.7 Government Policy Toward Monopoly
• The Microsoft Case
• Price Regulation
• Evidence-Based Economics: Can a monopoly ever be good for society?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 13: Game Theory and Strategic Play
• 13.1 Simultaneous-Move Games
• Best Responses and the Prisoners’ Dilemma
• Dominant Strategies and Dominant Strategy Equilibrium
• Games Without Dominant Strategies
• 13.2 Nash Equilibrium
• Finding a Nash Equilibrium
• Choice & Consequence: Work or Surf?
• 13.3 Applications of Nash Equilibria
• Tragedy of the Commons Revisited
• Zero-Sum Games
• 13.4 How Do People Actually Play Such Games?
• Game Theory in Penalty Kicks
• Evidence-Based Economics: Is there valuein putting yourself in someone else’s shoes?
• 13.5 Extensive-Form Games
• Backward Induction
• First-Mover Advantage, Commitment, and Vengeance
• Evidence-Based Economics: Is there value inputting yourself in someone else’s shoes in extensive-f
• Choice & Consequence: There Is More to Life Than Money
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 14: Oligopoly and Monopolistic Competition
• 14.1 Two More Market Structures
• 14.2 Oligopoly
• The Oligopolist’s Problem
• Oligopoly Model with Homogeneous Products
• Doing the Best You Can: How Should You Price to Maximize Profits?
• Oligopoly Model with Differentiated Products
• Letting the Data Speak: Airline Price Wars
• Collusion: Another Way to Keep Prices High
• Letting the Data Speak: Apple Versus Samsung
• Letting the Data Speak: To Cheat or Not to Cheat: That Is the Question
• Choice & Consequence: Collusion in Practice
• 14.3 Monopolistic Competition
• The Monopolistic Competitor’s Problem
• Doing the Best You Can: How a Monopolistic Competitor Maximizes Profits
• Letting the Data Speak: Why Do Some Firms Advertise and Some Don’t?
• How a Monopolistic Competitor Calculates Profits
• Long-Run Equilibrium in a Monopolistically Competitive Industry
• 14.4 The “Broken” Invisible Hand
• Regulating Market Power
• 14.5 Summing Up: Four Market Structures
• Letting the Podcast Speak: A Surprising Duopoly: Democrats and Republicans
• Evidence-Based Economics: How many firms are necessary to make a market competitive?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Part IV: Extending the Microeconomic Toolbox
• Chapter 15: Trade-offs Involving Time and Risk
• 15.1 Modeling Time and Risk
• 15.2 The Time Value of Money
• Future Value and the Compounding of Interest
• Borrowing Versus Lending
• Present Value and Discounting
• 15.3 Time Preferences
• Time Discounting
• Preference Reversals
• Choice & Consequence: Failing to Anticipate Preference Reversals
• Evidence-Based Economics: Do people exhibit a preference for immediate gratification?
• 15.4 Probability and Risk
• Roulette Wheels and Probabilities
• Independence and the Gambler’s Fallacy
• Letting the Data Speak: Roulette Wheels and Elections
• Expected Value
• Extended Warranties
• Choice & Consequence: Is Gambling Worthwhile?
• 15.5 Risk Preferences
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problem
• Problems
• Chapter 16: The Economics of Information
• 16.1 Asymmetric Information
• Hidden Characteristics: Adverse Selection in the Used Car Market
• Hidden Characteristics: Adverse Selection in the Health Insurance Market
• Market Solutions to Adverse Selection: Signaling
• Choice & Consequence: Are You Earning a Signal Right Now?
• Evidence-Based Economics: Why do new cars lose considerable value the minute they are driven off the
• Choice & Consequence: A Tale of a Tail
• 16.2 Hidden Actions: Markets with Moral Hazard
• Letting the Data Speak: Moral Hazard on Your Bike
• Market Solutions to Moral Hazard in the Labor Market: Efficiency Wages
• Letting the Podcast Speak: Tackling Adverse Selection and Moral Hazard in the Workplace
• Market Solutions to Moral Hazard in the Insurance Market: “Putting Your Skin in the Game”
• Letting the Data Speak: Designing Incentives for Teachers
• Evidence-Based Economics: Why is private health insurance so expensive?
• 16.3 Government Policy in a World of Asymmetric Information
• Government Intervention and Moral Hazard
• The Equity-Efficiency Trade-off
• Crime and Punishment as a Principal–Agent Problem
• Letting the Data Speak: Moral Hazard Among Job Seekers
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 17: Auctions and Bargaining
• 17.1 Auctions
• Types of Auctions
• Open Outcry: English Auctions
• Letting the Data Speak: To Snipe or Not to Snipe?
• Open Outcry: Dutch Auctions
• Sealed Bid: First-Price Auctions
• Sealed Bid: Second-Price Auctions
• The Revenue Equivalence Theorem
• Evidence-Based Economics: How should you bid in an eBay auction?
• 17.2 Bargaining
• What Determines Bargaining Outcomes?
• Bargaining in Action: The Ultimatum Game
• Bargaining and the Coase Theorem
• Evidence-Based Economics: Who determines how the household spends its money?
• Letting the Data Speak: Sex Ratios Change Bargaining Power Too
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 18: Social Economics
• 18.1 The Economics of Charity and Fairness
• The Economics of Charity
• Letting the Data Speak: Do People Donate Less When It’s Costlier to Give?
• Letting the Data Speak: Why Do People Give to Charity?
• The Economics of Fairness
• Letting the Data Speak: Dictators in the Lab
• Evidence-Based Economics: Do people care about fairness?
• 18.2 The Economics of Trust and Revenge
• The Economics of Trust
• The Economics of Revenge
• Choice & Consequence: Does Revenge Have an Evolutionary Logic?
• Letting the Podcast Speak: Sorry! I Should Apologize, but How?
• 18.3 How Others Influence Our Decisions
• Where Do Our Preferences Come From?
• The Economics of Peer Effects
• Letting the Data Speak: Is Economics Bad for You?
• Following the Crowd: Herding
• Letting the Data Speak: Your Peers Affect Your Waistline
• Choice & Consequence: Are You an Internet Explorer?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Part V: Introduction to Macroeconomics
• Chapter 19: The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates
• 19.1 Macroeconomic Questions
• 19.2 National Income Accounts: Production = Expenditure = Income
• Production
• Expenditure
• Income
• Circular Flows
• National Income Accounts: Production
• National Income Accounts: Expenditure
• Evidence-Based Economics: In the United States, what is the total market value of annual economic pr
• Letting the Data Speak: Saving versus Investment
• National Income Accounting: Income
• 19.3 What Isn’t Measured by GDP?
• Physical Capital Depreciation
• Home Production
• The Underground Economy
• Externalities
• Gross Domestic Product versus Gross National Product
• The Increase in Income Inequality
• Leisure
• Does GDP Buy Happiness?
• 19.4 Real versus Nominal
• The GDP Deflator
• The Consumer Price Index
• Inflation
• Adjusting Nominal Variables
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 20: Aggregate Incomes
• 20.1 Inequality Around the World
• Measuring Differences in GDP per Capita
• Letting the Data Speak: The Big Mac Index
• Cross-Country Differences in GDP per capita
• GDP per Worker
• Productivity
• Incomes and the Standard of Living
• Choice & Consequence: Dangers of Just Focusing on GDP per Capita
• 20.2 Productivity and the Aggregate Production Function
• Productivity Differences
• The Aggregate Production Function
• Labor
• Physical Capital and Land
• Technology
• Representing the Aggregate Production Function
• 20.3 The Role and Determinants of Technology
• Technology
• Dimensions of Technology
• Letting the Data Speak: Moore’s Law
• Choice & Consequence: Academic Misallocation in Nazi Germany
• Letting the Data Speak: Efficiency of Production and Productivity at the Company Level
• Entrepreneurship
• Letting the Data Speak: Monopoly and GDP
• Evidence-Based Economics: Why is the average American so much richer than the average Indian?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Appendix: The Mathematics of Aggregate Production Functions
• Part VI: Long-Run Growth and Development
• Chapter 21: Economic Growth
• 21.1 The Power of Economic Growth
• A First Look at U.S. Growth
• Exponential Growth
• Choice & Consequence: The Power of Exponential Growth
• Patterns of Growth
• Letting the Data Speak: Levels versus Growth
• 21.2 How Does a Nation’s Economy Grow?
• Optimization: The Choice Between Saving and Consumption
• What Brings Sustained Growth?
• Choice & Consequence: Is Increasing the Saving Rate Always a Good Idea?
• Knowledge, Technological Change, and Growth
• Letting the Data Speak: Technology and Life Expectancy
• 21.3 The History of Growth and Technology
• Growth Before Modern Times
• Letting the Data Speak: The Great Productivity Puzzle
• Evidence-Based Economics: Why are you so much more prosperous than your great-great-grandparents wer
• Malthusian Limits to Growth
• The Industrial Revolution
• Growth and Technology Since the Industrial Revolution
• 21.4 Growth, Inequality, and Poverty
• Growth and Inequality
• Growth and Poverty
• Letting the Data Speak: Income Inequality in the United States
• Choice & Consequence: Inequality versus Poverty
• How Can We Reduce Poverty?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Appendix: The Solow Growth Model
• The Three Building Blocks of the Solow Model
• Steady-State Equilibrium in the Solow Model
• Determinants of GDP
• Dynamic Equilibrium in the Solow Model
• Sources of Growth in the Solow Model
• Calculating Average (Compound) Growth Rates
• Appendix Key Terms
• Appendix Problems
• Chapter 22: Why Isn’t the Whole World Developed?
• 22.1 Proximate Versus Fundamental Causes of Prosperity
• Geography
• Culture
• Institutions
• A Natural Experiment of History
• 22.2 Institutions and Economic Development
• Inclusive and Extractive Economic Institutions
• How Economic Institutions Affect Economic Outcomes
• Letting the Data Speak: Democracy and Growth
• Letting the Data Speak: Divergence and Convergence in Eastern Europe
• The Logic of Extractive Economic Institutions
• Inclusive Economic Institutions and the Industrial Revolution
• Letting the Data Speak: Blocking the Railways
• Evidence-Based Economics: Are tropical and semitropical areas condemned to poverty by their geograph
• 22.3 Is Foreign Aid the Solution to World Poverty?
• Choice & Consequence: Foreign Aid and Corruption
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Part VII: Equilibrium in the Macroeconomy
• Chapter 23: Employment and Unemployment
• 23.1 Measuring Employment and Unemployment
• Classifying Potential Workers
• Calculating the Un employment Rate
• Trends in the Unemployment Rate
• 23.2 Equilibrium in the Labor Market
• The Demand for Labor
• Shifts in the Labor Demand Curve
• The Supply of Labor
• Shifts in the Labor Supply Curve
• Letting the Data Speak: Who Is Unemployed?
• Letting the Data Speak: Racial Disparities in Unemployment and the Existence of Racial Discriminatio
• Equilibrium in a Competitive Labor Market
• 23.3 Why Is There Unemployment?
• Voluntary Unemployment
• Job Search and Frictional Unemployment
• 23.4 Wage Rigidity and Structural Unemployment
• Minimum Wage Laws
• Choice & Consequence: Luddites and Robots
• Labor Unions and Collective Bargaining
• Efficiency Wages
• Choice & Consequence: Minimum Wage Laws and Employment
• Downward Wage Rigidity
• 23.5 Cyclical Unemployment and the Natural Rate of Unemployment
• Evidence-Based Economics: How did unemployment and wages respond to the COVID-19 pandemic in the Uni
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 24: Credit Markets
• 24.1 What Is the Credit Market?
• Borrowers and the Demand for Loans
• Real and Nominal Interest Rates
• The Credit Demand Curve
• Saving Decisions
• The Credit Supply Curve
• Choice & Consequence: Why Do People Save?
• Equilibriumin the Credit Market
• Credit Markets and the Efficient Allocation of Resources
• 24.2 Banks and Financial Intermediation: Putting Supply and Demand Together
• Letting the Data Speak: Financing Start-ups
• Assets and Liabilities on the Balance Sheet of a Bank
• 24.3 What Banks Do
• Identifying Profitable Lending Opportunities
• Maturity Transformation
• Management of Risk
• Bank Runs
• Bank Regulation and Bank Solvency
• Evidence-based Economics: How often do banks fail?
• Choice & Consequence: Too Big to Fail
• Choice & Consequence: Asset Price Fluctuations and Bank Failures
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 25: The Monetary System
• 25.1 Money
• The Functions of Money
• Types of Money
• The Money Supply
• Choice & Consequence: Non-Convertible Currencies in U.S. History
• 25.2 Money, Prices, and GDP
• Nominal GDP, Real GDP, and Inflation
• The Quantity Theory of Money
• 25.3 Inflation
• What Causes Inflation?
• The Consequences of Inflation
• The Social Costs of Inflation
• The Social Benefits of Inflation
• Evidence-Based Economics: What caused the German hyperinflation of 1922–1923?
• 25.4 The Federal Reserve
• The Central Bank and the Objectives of Monetary Policy
• What Does the Central Bank Do?
• 25.5 Bank Reserves and the Plumbing of the Monetary System
• Bank Reserves and Liquidity
• The Demand Side of the Federal Funds Market
• The Supply Side of the Federal Funds Market and Equilibrium in the Federal Funds Market
• Two Ways That the Fed Controls the Federal Funds Rate
• Choice & Consequence: Obtaining Reserves Outside the Federal Funds Market
• The Fed’s Influence on the Money Supply and the Inflation Rate
• The Relationship Between the Federal Funds Rate and the Long-Term Real Interest Rate
• Letting the Data Speak: Two Models of Inflation Expectations
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Part VIII: Short-Run Fluctuationsand Macroeconomic Policy
• Chapter 26: Short-Run Fluctuations
• 26.1 Economic Fluctuations and Business Cycles
• Patterns of Economic Fluctuations
• The Great Depression
• 26.2 Macroeconomic Equilibrium and Economic Fluctuations
• Labor Demand and Fluctuations
• Sources of Fluctuations
• Letting the Data Speak: Unemployment and the Growth Rate of Real GDP: Okun’s Law
• Multipliers and Economic Fluctuations
• Equilibrium in the Medium Run: Partial Recovery and Full Recovery
• 26.3 Modeling Expansions
• Evidence-Based Economics: What caused the recession of 2007–2009?
• Evidence-Based Economics: What caused the recession of 2020?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 27: Countercyclical Macroeconomic Policy
• 27.1 The Role of Countercyclical Policies in Economic Fluctuations
• 27.2 Countercyclical Monetary Policy
• Controlling the Federal Funds Rate
• Other Tools of the Fed
• Expectations, Inflation, and Monetary Policy
• Zero Lower Bound
• Letting the Data Speak: Managing Expectations in Monetary Policy
• Contractionary Monetary Policy: Reducing Inflation
• Policy Trade-Offs
• Choice & Consequence: Policy Mistakes
• 27.3 Countercyclical Fiscal Policy
• Fiscal Policy over the Business Cycle: Automatic and Discretionary Components
• Analysis of Expenditure-Based Fiscal Policy
• Analysis of Taxation-Based Fiscal Policy
• Letting the Data Speak: The Response of Consumption to Tax Cuts
• Fiscal Policies That Directly Target the Labor Market
• Policy Waste and Policy Lags
• Letting the Data Speak: Hybrid Policies That Involve Cooperation Between Fiscal and Monetary Policym
• Evidence-Based Economics: How much does government expenditure stimulate GDP?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Part IX: Macroeconomics in a Global Economy
• Chapter 28: Macroeconomics and International Trade
• 28.1 Why and How We Trade
• Absolute Advantage and Comparative Advantage
• Comparative Advantage and International Trade
• Efficiency and Winners and Losers from Trade
• How We Trade
• Letting the Data Speak: Living in an Interconnected World
• Choice & Consequence: Trade Policy and Politics
• Trade Barriers: Tariffs
• 28.2 The Current Account and the Financial Account
• Trade Surpluses and Trade Deficits
• International Financial Flows
• The Workings of the Current Account and the Financial Account
• 28.3 International Trade, Technology Transfer, and Economic Growth
• Letting the Data Speak: From IBM to Lenovo
• Evidence-Based Economics: Are companies like Nike harming workers in Vietnam?
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Chapter 29: Open Economy Macroeconomics
• 29.1 Exchange Rates
• Nominal Exchange Rates
• Flexible, Managed, and Fixed Exchange Rates
• 29.2 The Foreign Exchange Market
• How Do Governments Intervene in the Foreign Exchange Market?
• Defending an Overvalued Exchange Rate
• Choice & Consequence: Fixed Exchange Rates and Corruption
• Evidence-Based Economics: How did George Soros make $1 billion?
• 29.3 The Real Exchange Rate and Exports
• From the Nominal to the Real Exchange Rate
• Co-Movement Between the Nominal and the Real Exchange Rates
• The Real Exchange Rate and Net Exports
• Letting the Data Speak: Why Did the Chinese Authorities Keep the Yuan Undervalued?
• 29.4 GDP in the Open Economy
• Revisiting Black Wednesday
• Interest Rates, Exchange Rates, and Net Exports
• Letting the Data Speak: The Costs of Fixed Exchange Rates
• Summary
• Key Terms
• Questions
• Evidence-Based Economics Problems
• Problems
• Endnotes
• Glossary
• Credits
• Index
• A
• B
• C
• D
• E
• F
• G
• H
• I
• J
• K
• L
• M
• N
• O
• P
• Q
• R
• S
• T
• U
• V
• W
• X
• Y
• Z