Includes index.

Appendix. Graphing: A Brief Review -- Chapter 3. Interdependence and the Gains from Trade -- A Parable for the Modern Economy -- Comparative Advantage: The Driving Force of Specialization -- Applications of Comparative Advantage -- Part 2. How Markets Work -- Chapter 4. The Market Forces of Supply and Demand -- Markets and Competition -- Demand -- Supply -- Supply and Demand Together -- Chapter 5. Elasticity and its Application -- The Elasticity of Demand -- The Elasticity of Supply -- Three Applications of Supply, Demand, and Elasticity -- Chapter 6. Supply, Demand, and Government Policies -- Controls on Prices -- Taxes -- Part 3. Markets and Welfare -- Chapter 7. Consumers, Producers, and the Efficiency of Markets -- Consumer Surplus -- Producer Surplus -- Market Efficiency -- Conclusion: Market Efficiency and Market Failure -- Chapter 8. Application: The Costs of Taxation -- The Deadweight Loss of Taxation -- The Determinants of the Deadweight Loss -- Deadweight Loss and Tax Revenue as Taxes Vary -- Chapter 9. Application: International Trade -- The Determinants of Trade -- The Winners and Losers from Trade -- The Arguments for Restricting Trade -- Part 4. The Data of Macroeconomics -- Chapter 10. Measuring a Nation's Income -- The Economy's Income and Expenditure -- The Measurement of Gross Domestic Product -- The Components of GDP -- Real versus Nominal GDP -- Is GDP a Good Measure of Economic Well-Being? -- Chapter 11. Measuring the Cost of Living -- The Consumer Price Index -- Correcting Economic Variables for the Effects of Inflation -- Part 5. The Real Economy in the Long Run -- Chapter 12. Production and Growth -- Economic Growth around the World -- Productivity: Its Role and Determinants -- Economic Growth and Public Policy -- Conclusion: The Importance of Long-Run Growth -- Chapter 13. Saving, Investment, and the Financial System -- Financial Institutions in the U.S. Economy -- Saving and Investment in the National Income Accounts -- The Market for Loanable Funds -- Chapter 14. The Basic Tools of Finance -- Present Value: Measuring the Time Value of Money -- Managing Risk -- Asset Valuation -- Chapter 15. Unemployment -- Identifying Unemployment -- Job Search -- Minimum-Wage Laws -- Unions and Collective Bargaining -- The Theory of Efficiency Wages -- Part 6. Money and Prices in the Long Run -- Chapter 16. The Monetary System -- The Meaning of Money -- The Federal Reserve System -- Banks and the Money Supply -- Chapter 17. Money Growth and Inflation -- The Classical Theory of Inflation -- The Costs of Inflation -- Part 7. The Macroeconomics of Open Economies -- Chapter 18. Open-Economy Macroeconomics: Basic Concepts -- The International Flows of Goods and Capital -- The Prices for International Transactions: Real and Nominal Exchange Rates -- A First Theory of Exchange-Rate Determination: Purchasing-Power Parity -- Chapter 19. A Macroeconomic Theory of the Open Economy -- Supply and Demand for Loanable Funds and for Foreign-Currency Exchange -- Equilibrium in the Open Economy -- How Policies and Events Affect an Open Economy -- Part 8. Short-Run Economic Fluctuations -- Chapter 20. Aggregate Demand and Aggregate Supply -- Three Key Facts about Economic Fluctuations -- Explaining Short-Run Economic Fluctuations -- The Aggregate-Demand Curve -- The Aggregate-Supply Curve -- Two Causes of Economic Fluctuations -- Chapter 21. The Influence of Monetary and Fiscal Policy on Aggregate Demand -- How Monetary Policy Influences Aggregate Demand -- How Fiscal Policy Influences Aggregate Demand -- Using Policy to Stabilize the Economy -- Chapter 22. The Short-Run Trade-Off Between Inflation and Unemployment -- The Phillips Curve -- Shifts in the Phillips Curve: The Role of Expectations -- Shifts in the Phillips Curve: The Role of Supply Shocks -- The Cost of Reducing Inflation -- Part 9. Final Thoughts -- Chapter 23. Five Debates Over Macroeconomic Policy -- Should Monetary and Fiscal Policymakers Try to Stabilize the Economy? -- Should Monetary Policy Be Made by Rule Rather Than by Discretion? -- Should the Central Bank Aim for Zero Inflation? -- Should the Government Balance Its Budget? -- Should the Tax Laws Be Reformed to Encourage Saving? -- Appendix. Quick Quiz Answers.