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Principles of Economics 3e

Index

Principles of Economics 3eIndex
Table of contents
  1. Preface
  2. 1 Welcome to Economics!
    1. Introduction
    2. 1.1 What Is Economics, and Why Is It Important?
    3. 1.2 Microeconomics and Macroeconomics
    4. 1.3 How Economists Use Theories and Models to Understand Economic Issues
    5. 1.4 How To Organize Economies: An Overview of Economic Systems
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
  3. 2 Choice in a World of Scarcity
    1. Introduction to Choice in a World of Scarcity
    2. 2.1 How Individuals Make Choices Based on Their Budget Constraint
    3. 2.2 The Production Possibilities Frontier and Social Choices
    4. 2.3 Confronting Objections to the Economic Approach
    5. Key Terms
    6. Key Concepts and Summary
    7. Self-Check Questions
    8. Review Questions
    9. Critical Thinking Questions
    10. Problems
  4. 3 Demand and Supply
    1. Introduction to Demand and Supply
    2. 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
    3. 3.2 Shifts in Demand and Supply for Goods and Services
    4. 3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process
    5. 3.4 Price Ceilings and Price Floors
    6. 3.5 Demand, Supply, and Efficiency
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  5. 4 Labor and Financial Markets
    1. Introduction to Labor and Financial Markets
    2. 4.1 Demand and Supply at Work in Labor Markets
    3. 4.2 Demand and Supply in Financial Markets
    4. 4.3 The Market System as an Efficient Mechanism for Information
    5. Key Terms
    6. Key Concepts and Summary
    7. Self-Check Questions
    8. Review Questions
    9. Critical Thinking Questions
    10. Problems
  6. 5 Elasticity
    1. Introduction to Elasticity
    2. 5.1 Price Elasticity of Demand and Price Elasticity of Supply
    3. 5.2 Polar Cases of Elasticity and Constant Elasticity
    4. 5.3 Elasticity and Pricing
    5. 5.4 Elasticity in Areas Other Than Price
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  7. 6 Consumer Choices
    1. Introduction to Consumer Choices
    2. 6.1 Consumption Choices
    3. 6.2 How Changes in Income and Prices Affect Consumption Choices
    4. 6.3 Behavioral Economics: An Alternative Framework for Consumer Choice
    5. Key Terms
    6. Key Concepts and Summary
    7. Self-Check Questions
    8. Review Questions
    9. Critical Thinking Questions
    10. Problems
  8. 7 Production, Costs, and Industry Structure
    1. Introduction to Production, Costs, and Industry Structure
    2. 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit
    3. 7.2 Production in the Short Run
    4. 7.3 Costs in the Short Run
    5. 7.4 Production in the Long Run
    6. 7.5 Costs in the Long Run
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  9. 8 Perfect Competition
    1. Introduction to Perfect Competition
    2. 8.1 Perfect Competition and Why It Matters
    3. 8.2 How Perfectly Competitive Firms Make Output Decisions
    4. 8.3 Entry and Exit Decisions in the Long Run
    5. 8.4 Efficiency in Perfectly Competitive Markets
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  10. 9 Monopoly
    1. Introduction to a Monopoly
    2. 9.1 How Monopolies Form: Barriers to Entry
    3. 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
    4. Key Terms
    5. Key Concepts and Summary
    6. Self-Check Questions
    7. Review Questions
    8. Critical Thinking Questions
    9. Problems
  11. 10 Monopolistic Competition and Oligopoly
    1. Introduction to Monopolistic Competition and Oligopoly
    2. 10.1 Monopolistic Competition
    3. 10.2 Oligopoly
    4. Key Terms
    5. Key Concepts and Summary
    6. Self-Check Questions
    7. Review Questions
    8. Critical Thinking Questions
    9. Problems
  12. 11 Monopoly and Antitrust Policy
    1. Introduction to Monopoly and Antitrust Policy
    2. 11.1 Corporate Mergers
    3. 11.2 Regulating Anticompetitive Behavior
    4. 11.3 Regulating Natural Monopolies
    5. 11.4 The Great Deregulation Experiment
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  13. 12 Environmental Protection and Negative Externalities
    1. Introduction to Environmental Protection and Negative Externalities
    2. 12.1 The Economics of Pollution
    3. 12.2 Command-and-Control Regulation
    4. 12.3 Market-Oriented Environmental Tools
    5. 12.4 The Benefits and Costs of U.S. Environmental Laws
    6. 12.5 International Environmental Issues
    7. 12.6 The Tradeoff between Economic Output and Environmental Protection
    8. Key Terms
    9. Key Concepts and Summary
    10. Self-Check Questions
    11. Review Questions
    12. Critical Thinking Questions
    13. Problems
  14. 13 Positive Externalities and Public Goods
    1. Introduction to Positive Externalities and Public Goods
    2. 13.1 Investments in Innovation
    3. 13.2 How Governments Can Encourage Innovation
    4. 13.3 Public Goods
    5. Key Terms
    6. Key Concepts and Summary
    7. Self-Check Questions
    8. Review Questions
    9. Critical Thinking Questions
    10. Problems
  15. 14 Labor Markets and Income
    1. Introduction to Labor Markets and Income
    2. 14.1 The Theory of Labor Markets
    3. 14.2 Wages and Employment in an Imperfectly Competitive Labor Market
    4. 14.3 Market Power on the Supply Side of Labor Markets: Unions
    5. 14.4 Bilateral Monopoly
    6. 14.5 Employment Discrimination
    7. 14.6 Immigration
    8. Key Terms
    9. Key Concepts and Summary
    10. Self-Check Questions
    11. Review Questions
    12. Critical Thinking Questions
  16. 15 Poverty and Economic Inequality
    1. Introduction to Poverty and Economic Inequality
    2. 15.1 Drawing the Poverty Line
    3. 15.2 The Poverty Trap
    4. 15.3 The Safety Net
    5. 15.4 Income Inequality: Measurement and Causes
    6. 15.5 Government Policies to Reduce Income Inequality
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  17. 16 Information, Risk, and Insurance
    1. Introduction to Information, Risk, and Insurance
    2. 16.1 The Problem of Imperfect Information and Asymmetric Information
    3. 16.2 Insurance and Imperfect Information
    4. Key Terms
    5. Key Concepts and Summary
    6. Self-Check Questions
    7. Review Questions
    8. Critical Thinking Questions
    9. Problems
  18. 17 Financial Markets
    1. Introduction to Financial Markets
    2. 17.1 How Businesses Raise Financial Capital
    3. 17.2 How Households Supply Financial Capital
    4. 17.3 How to Accumulate Personal Wealth
    5. Key Terms
    6. Key Concepts and Summary
    7. Self-Check Questions
    8. Review Questions
    9. Critical Thinking Questions
    10. Problems
  19. 18 Public Economy
    1. Introduction to Public Economy
    2. 18.1 Voter Participation and Costs of Elections
    3. 18.2 Special Interest Politics
    4. 18.3 Flaws in the Democratic System of Government
    5. Key Terms
    6. Key Concepts and Summary
    7. Self-Check Questions
    8. Review Questions
    9. Critical Thinking Questions
    10. Problems
  20. 19 The Macroeconomic Perspective
    1. Introduction to the Macroeconomic Perspective
    2. 19.1 Measuring the Size of the Economy: Gross Domestic Product
    3. 19.2 Adjusting Nominal Values to Real Values
    4. 19.3 Tracking Real GDP over Time
    5. 19.4 Comparing GDP among Countries
    6. 19.5 How Well GDP Measures the Well-Being of Society
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  21. 20 Economic Growth
    1. Introduction to Economic Growth
    2. 20.1 The Relatively Recent Arrival of Economic Growth
    3. 20.2 Labor Productivity and Economic Growth
    4. 20.3 Components of Economic Growth
    5. 20.4 Economic Convergence
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  22. 21 Unemployment
    1. Introduction to Unemployment
    2. 21.1 How Economists Define and Compute Unemployment Rate
    3. 21.2 Patterns of Unemployment
    4. 21.3 What Causes Changes in Unemployment over the Short Run
    5. 21.4 What Causes Changes in Unemployment over the Long Run
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  23. 22 Inflation
    1. Introduction to Inflation
    2. 22.1 Tracking Inflation
    3. 22.2 How to Measure Changes in the Cost of Living
    4. 22.3 How the U.S. and Other Countries Experience Inflation
    5. 22.4 The Confusion Over Inflation
    6. 22.5 Indexing and Its Limitations
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  24. 23 The International Trade and Capital Flows
    1. Introduction to the International Trade and Capital Flows
    2. 23.1 Measuring Trade Balances
    3. 23.2 Trade Balances in Historical and International Context
    4. 23.3 Trade Balances and Flows of Financial Capital
    5. 23.4 The National Saving and Investment Identity
    6. 23.5 The Pros and Cons of Trade Deficits and Surpluses
    7. 23.6 The Difference between Level of Trade and the Trade Balance
    8. Key Terms
    9. Key Concepts and Summary
    10. Self-Check Questions
    11. Review Questions
    12. Critical Thinking Questions
    13. Problems
  25. 24 The Aggregate Demand/Aggregate Supply Model
    1. Introduction to the Aggregate Supply–Aggregate Demand Model
    2. 24.1 Macroeconomic Perspectives on Demand and Supply
    3. 24.2 Building a Model of Aggregate Demand and Aggregate Supply
    4. 24.3 Shifts in Aggregate Supply
    5. 24.4 Shifts in Aggregate Demand
    6. 24.5 How the AD/AS Model Incorporates Growth, Unemployment, and Inflation
    7. 24.6 Keynes’ Law and Say’s Law in the AD/AS Model
    8. Key Terms
    9. Key Concepts and Summary
    10. Self-Check Questions
    11. Review Questions
    12. Critical Thinking Questions
    13. Problems
  26. 25 The Keynesian Perspective
    1. Introduction to the Keynesian Perspective
    2. 25.1 Aggregate Demand in Keynesian Analysis
    3. 25.2 The Building Blocks of Keynesian Analysis
    4. 25.3 The Phillips Curve
    5. 25.4 The Keynesian Perspective on Market Forces
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
  27. 26 The Neoclassical Perspective
    1. Introduction to the Neoclassical Perspective
    2. 26.1 The Building Blocks of Neoclassical Analysis
    3. 26.2 The Policy Implications of the Neoclassical Perspective
    4. 26.3 Balancing Keynesian and Neoclassical Models
    5. Key Terms
    6. Key Concepts and Summary
    7. Self-Check Questions
    8. Review Questions
    9. Critical Thinking Questions
    10. Problems
  28. 27 Money and Banking
    1. Introduction to Money and Banking
    2. 27.1 Defining Money by Its Functions
    3. 27.2 Measuring Money: Currency, M1, and M2
    4. 27.3 The Role of Banks
    5. 27.4 How Banks Create Money
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  29. 28 Monetary Policy and Bank Regulation
    1. Introduction to Monetary Policy and Bank Regulation
    2. 28.1 The Federal Reserve Banking System and Central Banks
    3. 28.2 Bank Regulation
    4. 28.3 How a Central Bank Executes Monetary Policy
    5. 28.4 Monetary Policy and Economic Outcomes
    6. 28.5 Pitfalls for Monetary Policy
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  30. 29 Exchange Rates and International Capital Flows
    1. Introduction to Exchange Rates and International Capital Flows
    2. 29.1 How the Foreign Exchange Market Works
    3. 29.2 Demand and Supply Shifts in Foreign Exchange Markets
    4. 29.3 Macroeconomic Effects of Exchange Rates
    5. 29.4 Exchange Rate Policies
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  31. 30 Government Budgets and Fiscal Policy
    1. Introduction to Government Budgets and Fiscal Policy
    2. 30.1 Government Spending
    3. 30.2 Taxation
    4. 30.3 Federal Deficits and the National Debt
    5. 30.4 Using Fiscal Policy to Fight Recession, Unemployment, and Inflation
    6. 30.5 Automatic Stabilizers
    7. 30.6 Practical Problems with Discretionary Fiscal Policy
    8. 30.7 The Question of a Balanced Budget
    9. Key Terms
    10. Key Concepts and Summary
    11. Self-Check Questions
    12. Review Questions
    13. Critical Thinking Questions
    14. Problems
  32. 31 The Impacts of Government Borrowing
    1. Introduction to the Impacts of Government Borrowing
    2. 31.1 How Government Borrowing Affects Investment and the Trade Balance
    3. 31.2 Fiscal Policy and the Trade Balance
    4. 31.3 How Government Borrowing Affects Private Saving
    5. 31.4 Fiscal Policy, Investment, and Economic Growth
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  33. 32 Macroeconomic Policy Around the World
    1. Introduction to Macroeconomic Policy around the World
    2. 32.1 The Diversity of Countries and Economies across the World
    3. 32.2 Improving Countries’ Standards of Living
    4. 32.3 Causes of Unemployment around the World
    5. 32.4 Causes of Inflation in Various Countries and Regions
    6. 32.5 Balance of Trade Concerns
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  34. 33 International Trade
    1. Introduction to International Trade
    2. 33.1 Absolute and Comparative Advantage
    3. 33.2 What Happens When a Country Has an Absolute Advantage in All Goods
    4. 33.3 Intra-Industry Trade between Similar Economies
    5. 33.4 The Benefits of Reducing Barriers to International Trade
    6. Key Terms
    7. Key Concepts and Summary
    8. Self-Check Questions
    9. Review Questions
    10. Critical Thinking Questions
    11. Problems
  35. 34 Globalization and Protectionism
    1. Introduction to Globalization and Protectionism
    2. 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
    3. 34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
    4. 34.3 Arguments in Support of Restricting Imports
    5. 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
    6. 34.5 The Tradeoffs of Trade Policy
    7. Key Terms
    8. Key Concepts and Summary
    9. Self-Check Questions
    10. Review Questions
    11. Critical Thinking Questions
    12. Problems
  36. A | The Use of Mathematics in Principles of Economics
  37. B | Indifference Curves
  38. C | Present Discounted Value
  39. D | The Expenditure-Output Model
  40. Answer Key
    1. Chapter 1
    2. Chapter 2
    3. Chapter 3
    4. Chapter 4
    5. Chapter 5
    6. Chapter 6
    7. Chapter 7
    8. Chapter 8
    9. Chapter 9
    10. Chapter 10
    11. Chapter 11
    12. Chapter 12
    13. Chapter 13
    14. Chapter 14
    15. Chapter 15
    16. Chapter 16
    17. Chapter 17
    18. Chapter 18
    19. Chapter 19
    20. Chapter 20
    21. Chapter 21
    22. Chapter 22
    23. Chapter 23
    24. Chapter 24
    25. Chapter 25
    26. Chapter 26
    27. Chapter 27
    28. Chapter 28
    29. Chapter 29
    30. Chapter 30
    31. Chapter 31
    32. Chapter 32
    33. Chapter 33
    34. Chapter 34
  41. References
  42. Index
Symbols
401(k) 22.4 The Confusion Over Inflation
A
A.W. Phillips 25.3 The Phillips Curve
AARP 18.2 Special Interest Politics
Abhijit Bannerjee 32.2 Improving Countries’ Standards of Living
Abraham García 20.3 Components of Economic Growth
absolute advantage 33.1 Absolute and Comparative Advantage
Accounting profit 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit, 10.1 Monopolistic Competition
acquisition 11.1 Corporate Mergers
actual rate of return 17.2 How Households Supply Financial Capital
Adam Smith 1.1 What Is Economics, and Why Is It Important?, 2.3 Confronting Objections to the Economic Approach, 10.2 Oligopoly, 24.1 Macroeconomic Perspectives on Demand and Supply
adaptive expectations 26.1 The Building Blocks of Neoclassical Analysis
additional external costs 12.1 The Economics of Pollution
adjustable-rate mortgage (ARM) 22.5 Indexing and Its Limitations
Adverse selection 16.2 Insurance and Imperfect Information
adverse selection of wage cuts argument 21.3 What Causes Changes in Unemployment over the Short Run
Affirmative action 14.5 Employment Discrimination
Affordable Care Act (ACA) Introduction to Information, Risk, and Insurance, 16.2 Insurance and Imperfect Information, 18.2 Special Interest Politics
Age Discrimination in Employment Act 14.5 Employment Discrimination
aggregate demand Introduction to the Aggregate Supply–Aggregate Demand Model, 25.1 Aggregate Demand in Keynesian Analysis, 26.1 The Building Blocks of Neoclassical Analysis, 26.2 The Policy Implications of the Neoclassical Perspective, 26.2 The Policy Implications of the Neoclassical Perspective, 28.4 Monetary Policy and Economic Outcomes, 28.5 Pitfalls for Monetary Policy, 29.3 Macroeconomic Effects of Exchange Rates, 30.4 Using Fiscal Policy to Fight Recession, Unemployment, and Inflation, 32.3 Causes of Unemployment around the World, Appendix D The Expenditure-Output Model
aggregate demand (AD) Introduction to the Macroeconomic Perspective, 24.2 Building a Model of Aggregate Demand and Aggregate Supply
aggregate demand (AD) curve 24.2 Building a Model of Aggregate Demand and Aggregate Supply
aggregate demand/aggregate supply (AD/AS) Introduction to Money and Banking
aggregate demand/aggregate supply model 24.2 Building a Model of Aggregate Demand and Aggregate Supply, 26.1 The Building Blocks of Neoclassical Analysis
aggregate expenditure function Appendix D The Expenditure-Output Model
aggregate expenditure line Appendix D The Expenditure-Output Model
aggregate expenditure schedule Appendix D The Expenditure-Output Model
aggregate expenditures Appendix D The Expenditure-Output Model
aggregate production function 20.2 Labor Productivity and Economic Growth, 20.3 Components of Economic Growth, 20.4 Economic Convergence
aggregate supply Introduction to the Aggregate Supply–Aggregate Demand Model, 26.1 The Building Blocks of Neoclassical Analysis, 30.4 Using Fiscal Policy to Fight Recession, Unemployment, and Inflation
aggregate supply (AS) Introduction to the Macroeconomic Perspective, 24.2 Building a Model of Aggregate Demand and Aggregate Supply
aggregate supply (AS) curve 24.2 Building a Model of Aggregate Demand and Aggregate Supply
aggregate supply curve 26.2 The Policy Implications of the Neoclassical Perspective
Agriculture and Food Research Initiative (AFRI) 13.2 How Governments Can Encourage Innovation
Aid to Families with Dependent Children (AFDC) 15.3 The Safety Net
Alexander Gerschenkron 20.4 Economic Convergence
Alfred Marshall 3.5 Demand, Supply, and Efficiency
Allocative efficiency 2.2 The Production Possibilities Frontier and Social Choices, 8.4 Efficiency in Perfectly Competitive Markets, 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price, 12 Key Concepts and Summary
American Federation of State 14.3 Market Power on the Supply Side of Labor Markets: Unions
American Recovery and Reinvestment Act of 2009 25.2 The Building Blocks of Keynesian Analysis
Anthony Downs 18.1 Voter Participation and Costs of Elections
Anti-dumping laws 34.3 Arguments in Support of Restricting Imports
Antitrust Division of the Justice Department 10.2 Oligopoly
antitrust laws 11.1 Corporate Mergers
appreciating 29.1 How the Foreign Exchange Market Works
arbitrage 29.2 Demand and Supply Shifts in Foreign Exchange Markets
Asian Financial Crisis 32.5 Balance of Trade Concerns
asset 27.3 The Role of Banks
asset-liability time mismatch 27.3 The Role of Banks
assets 28.2 Bank Regulation
asymmetric information 16.1 The Problem of Imperfect Information and Asymmetric Information
automatic stabilizers 30.5 Automatic Stabilizers, 32.3 Causes of Unemployment around the World
average cost 7.3 Costs in the Short Run
average cost curve 11.3 Regulating Natural Monopolies
average profit 7.3 Costs in the Short Run
Average total cost 7.3 Costs in the Short Run
average variable cost 7.3 Costs in the Short Run
B
balance of payments 23.3 Trade Balances and Flows of Financial Capital
balance of trade Introduction to the International Trade and Capital Flows, 23.6 The Difference between Level of Trade and the Trade Balance, 29.4 Exchange Rate Policies
balance sheet 27.3 The Role of Banks
balanced budget 30.1 Government Spending, 30.7 The Question of a Balanced Budget
bank capital 27.3 The Role of Banks, 28.2 Bank Regulation
Bank regulation 28.2 Bank Regulation
bank run 28.2 Bank Regulation
bankrupt 29.3 Macroeconomic Effects of Exchange Rates
bar graph Appendix A The Use of Mathematics in Principles of Economics
Barriers to entry 9.1 How Monopolies Form: Barriers to Entry
Barter 27.1 Defining Money by Its Functions
base year 22.1 Tracking Inflation
basic quantity equation of money 28.5 Pitfalls for Monetary Policy
basket of goods and services 22.1 Tracking Inflation
Behavioral economics 6.3 Behavioral Economics: An Alternative Framework for Consumer Choice
behavioral economists 16.1 The Problem of Imperfect Information and Asymmetric Information
bilateral monopoly 14.4 Bilateral Monopoly
biodiversity 12.5 International Environmental Issues
Bipartisan Campaign Reform Act (BCRA) 18.1 Voter Participation and Costs of Elections
bond 17.1 How Businesses Raise Financial Capital
bond yield 17.2 How Households Supply Financial Capital
bondholder 17.1 How Businesses Raise Financial Capital
bonds 17.2 How Households Supply Financial Capital, 22.5 Indexing and Its Limitations, 27.3 The Role of Banks, 28.3 How a Central Bank Executes Monetary Policy, Appendix C Present Discounted Value
break even point 8.2 How Perfectly Competitive Firms Make Output Decisions
budget constraint 2.1 How Individuals Make Choices Based on Their Budget Constraint, 6.1 Consumption Choices, 6.2 How Changes in Income and Prices Affect Consumption Choices, Appendix B Indifference Curves
budget constraint (or budget line) 6.1 Consumption Choices
budget constraint line 15.2 The Poverty Trap
budget deficit 30.1 Government Spending
budget line Appendix B Indifference Curves
budget surplus 30.1 Government Spending
bundling 11.2 Regulating Anticompetitive Behavior
Bureau of Economic Analysis (BEA) 23.1 Measuring Trade Balances
Bureau of Labor Statistics 19.5 How Well GDP Measures the Well-Being of Society
business confidence 24.4 Shifts in Aggregate Demand
business cycle 19.3 Tracking Real GDP over Time
C
Capital 7.2 Production in the Short Run
capital deepening 20.3 Components of Economic Growth
capital gain 17.1 How Businesses Raise Financial Capital
cartel 10.2 Oligopoly
Celler-Kefauver Act 11.1 Corporate Mergers
central bank 28.1 The Federal Reserve Banking System and Central Banks, 28.5 Pitfalls for Monetary Policy, 29.3 Macroeconomic Effects of Exchange Rates, 29.4 Exchange Rate Policies
certificate of deposit (CD) 17.2 How Households Supply Financial Capital
certificates of deposit (CDs) 27.2 Measuring Money: Currency, M1, and M2
ceteris paribus 3.2 Shifts in Demand and Supply for Goods and Services, 3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process, 4.1 Demand and Supply at Work in Labor Markets
checking account 17.2 How Households Supply Financial Capital
circular flow diagram 1.3 How Economists Use Theories and Models to Understand Economic Issues
Civil Rights Act of 1964 14.5 Employment Discrimination
Civil Rights Act of 1991 14.5 Employment Discrimination
Clayton Antitrust Act 11.1 Corporate Mergers
Clean Air Act 12.2 Command-and-Control Regulation, 12.3 Market-Oriented Environmental Tools, 12.4 The Benefits and Costs of U.S. Environmental Laws
Clean Water Act 12.2 Command-and-Control Regulation
coins and currency in circulation 27.2 Measuring Money: Currency, M1, and M2
coinsurance 16.2 Insurance and Imperfect Information
collateral 16.1 The Problem of Imperfect Information and Asymmetric Information
collective bargaining 14.3 Market Power on the Supply Side of Labor Markets: Unions
collusion 10.2 Oligopoly
command economy 1.4 How To Organize Economies: An Overview of Economic Systems
command-and-control regulation 12.2 Command-and-Control Regulation
commodity money 27.1 Defining Money by Its Functions
Commodity-backed currencies 27.1 Defining Money by Its Functions
common markets 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
common resources 13.3 Public Goods
comparative advantage 1.1 What Is Economics, and Why Is It Important?, 2.2 The Production Possibilities Frontier and Social Choices, 23.3 Trade Balances and Flows of Financial Capital, 33.1 Absolute and Comparative Advantage, 34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
competition 13.1 Investments in Innovation
competitive market 14.5 Employment Discrimination
complements 3.2 Shifts in Demand and Supply for Goods and Services
compound growth rate 20.2 Labor Productivity and Economic Growth
Compound interest 17.3 How to Accumulate Personal Wealth
concentration ratio 11.1 Corporate Mergers
constant returns to scale 7.5 Costs in the Long Run
Constant unitary elasticity 5.2 Polar Cases of Elasticity and Constant Elasticity
constant-cost industry 8.3 Entry and Exit Decisions in the Long Run
consumer confidence 24.4 Shifts in Aggregate Demand
consumer equilibrium 6.1 Consumption Choices
Consumer Price Index (CPI) 22.2 How to Measure Changes in the Cost of Living
consumer surplus 3.5 Demand, Supply, and Efficiency, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
consumption 6.1 Consumption Choices
consumption budget constraint 2.2 The Production Possibilities Frontier and Social Choices
consumption demand 19.1 Measuring the Size of the Economy: Gross Domestic Product
consumption function Appendix D The Expenditure-Output Model
contractionary fiscal policy 25.3 The Phillips Curve, 30.4 Using Fiscal Policy to Fight Recession, Unemployment, and Inflation
contractionary monetary policy 28.4 Monetary Policy and Economic Outcomes, 29.4 Exchange Rate Policies, 31.4 Fiscal Policy, Investment, and Economic Growth
contractual rights 20.1 The Relatively Recent Arrival of Economic Growth
convergence 20.4 Economic Convergence
converging economy 32.4 Causes of Inflation in Various Countries and Regions
coordination argument 25.2 The Building Blocks of Keynesian Analysis
copayment 16.2 Insurance and Imperfect Information
copyright 9.1 How Monopolies Form: Barriers to Entry
core competency 1.1 What Is Economics, and Why Is It Important?
core inflation index 22.2 How to Measure Changes in the Cost of Living
corporate bond 17.1 How Businesses Raise Financial Capital
corporate governance 17.1 How Businesses Raise Financial Capital
corporate income tax 30.2 Taxation
corporation 17.1 How Businesses Raise Financial Capital
cosigner 16.1 The Problem of Imperfect Information and Asymmetric Information
cost 2.2 The Production Possibilities Frontier and Social Choices
cost of living 22.2 How to Measure Changes in the Cost of Living
cost-of-living adjustments (COLAs) 22.5 Indexing and Its Limitations
cost-plus regulation 11.3 Regulating Natural Monopolies
countercyclical 28.4 Monetary Policy and Economic Outcomes
County and Municipal Employees (AFSCME) 14.3 Market Power on the Supply Side of Labor Markets: Unions
coupon rate 17.2 How Households Supply Financial Capital
COVID-19 pandemic 32.3 Causes of Unemployment around the World
credit card 27.2 Measuring Money: Currency, M1, and M2
credit union 27.3 The Role of Banks
cross-price elasticity of demand 5.4 Elasticity in Areas Other Than Price
crowding out 30.6 Practical Problems with Discretionary Fiscal Policy, 31.4 Fiscal Policy, Investment, and Economic Growth
CTC 15.3 The Safety Net
current account balance 23.1 Measuring Trade Balances
cyclical unemployment 21.3 What Causes Changes in Unemployment over the Short Run, 24.5 How the AD/AS Model Incorporates Growth, Unemployment, and Inflation, 26.2 The Policy Implications of the Neoclassical Perspective
D
David Ricardo 33.1 Absolute and Comparative Advantage
deadweight loss 3.5 Demand, Supply, and Efficiency
dealers 29.1 How the Foreign Exchange Market Works
debit card 17.2 How Households Supply Financial Capital, 27.2 Measuring Money: Currency, M1, and M2
decreasing-cost industry 8.3 Entry and Exit Decisions in the Long Run
deductibles 16.2 Insurance and Imperfect Information
deficit 31.1 How Government Borrowing Affects Investment and the Trade Balance
deflation 22.3 How the U.S. and Other Countries Experience Inflation, 28.5 Pitfalls for Monetary Policy
demand 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 13.1 Investments in Innovation, 19.1 Measuring the Size of the Economy: Gross Domestic Product, 24.1 Macroeconomic Perspectives on Demand and Supply, Introduction to Exchange Rates and International Capital Flows
demand and supply diagram 3.5 Demand, Supply, and Efficiency
demand and supply models 4.3 The Market System as an Efficient Mechanism for Information
demand curve 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 3.2 Shifts in Demand and Supply for Goods and Services, 5.1 Price Elasticity of Demand and Price Elasticity of Supply, 5.2 Polar Cases of Elasticity and Constant Elasticity, 10.1 Monopolistic Competition, 10.1 Monopolistic Competition, 29.2 Demand and Supply Shifts in Foreign Exchange Markets, 31.4 Fiscal Policy, Investment, and Economic Growth, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
demand curves 11.1 Corporate Mergers
demand deposits 27.2 Measuring Money: Currency, M1, and M2
demand schedule 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
democracy 18.3 Flaws in the Democratic System of Government
Deposit insurance 16.2 Insurance and Imperfect Information, 28.2 Bank Regulation
depository institutions 27.3 The Role of Banks
depreciating 29.1 How the Foreign Exchange Market Works
depreciation 19.1 Measuring the Size of the Economy: Gross Domestic Product
depression 19.3 Tracking Real GDP over Time, 21.2 Patterns of Unemployment
deregulation 9.1 How Monopolies Form: Barriers to Entry, 11.4 The Great Deregulation Experiment
derived demand 14.1 The Theory of Labor Markets
differentiated products 10.1 Monopolistic Competition, 10.1 Monopolistic Competition
diminishing marginal productivity 7.3 Costs in the Short Run
diminishing marginal utility 6.1 Consumption Choices, Appendix B Indifference Curves
direct investment 29.4 Exchange Rate Policies
discount rate 28.3 How a Central Bank Executes Monetary Policy
Discouraged workers 21.1 How Economists Define and Compute Unemployment Rate
discretionary fiscal policy 30.5 Automatic Stabilizers, 32.3 Causes of Unemployment around the World
Discrimination 14.5 Employment Discrimination
diseconomies of scale 7.5 Costs in the Long Run
disposable income 25.1 Aggregate Demand in Keynesian Analysis
disruptive market change 34.5 The Tradeoffs of Trade Policy
diversification 17.2 How Households Supply Financial Capital
diversify 27.3 The Role of Banks
dividend 17.1 How Businesses Raise Financial Capital
division of labor 1.1 What Is Economics, and Why Is It Important?, 33.3 Intra-Industry Trade between Similar Economies
Dodd-Frank Act 11.4 The Great Deregulation Experiment
dollarize 29.1 How the Foreign Exchange Market Works
double coincidence of wants 27.1 Defining Money by Its Functions
double counting 19.1 Measuring the Size of the Economy: Gross Domestic Product
Dow Jones 28.5 Pitfalls for Monetary Policy
Dow Jones Index 17.2 How Households Supply Financial Capital
dumping 33.4 The Benefits of Reducing Barriers to International Trade, 34.3 Arguments in Support of Restricting Imports
duopoly 10.2 Oligopoly
durable goods 19.1 Measuring the Size of the Economy: Gross Domestic Product
E
earned income tax credit (EITC) 15.3 The Safety Net
East Asian Tigers 32.2 Improving Countries’ Standards of Living
economic efficiency 2.3 Confronting Objections to the Economic Approach
economic growth Introduction to Money and Banking
Economic profit 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit
economic surplus 3.5 Demand, Supply, and Efficiency
economic unions 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
Economics 1.1 What Is Economics, and Why Is It Important?
economies of scale 1.1 What Is Economics, and Why Is It Important?, 7.5 Costs in the Long Run, 9.1 How Monopolies Form: Barriers to Entry, 33.3 Intra-Industry Trade between Similar Economies
ecotourism 12.4 The Benefits and Costs of U.S. Environmental Laws
effective income tax 15.5 Government Policies to Reduce Income Inequality
efficiency 3.5 Demand, Supply, and Efficiency
Efficiency wage theory 21.3 What Causes Changes in Unemployment over the Short Run
elastic demand 5.1 Price Elasticity of Demand and Price Elasticity of Supply
elastic supply 5.1 Price Elasticity of Demand and Price Elasticity of Supply
Elasticity Introduction to Elasticity
elasticity of savings 5.4 Elasticity in Areas Other Than Price
Employment Cost Index 22.2 How to Measure Changes in the Cost of Living
Entrepreneurship 7.2 Production in the Short Run
entry 8.3 Entry and Exit Decisions in the Long Run
Equal Employment Opportunity Commission (EEOC) 14.5 Employment Discrimination
Equal Pay Act of 1963 14.5 Employment Discrimination
equilibrium 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 3.5 Demand, Supply, and Efficiency, 4.1 Demand and Supply at Work in Labor Markets, 10.1 Monopolistic Competition, 16.1 The Problem of Imperfect Information and Asymmetric Information, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers, Appendix D The Expenditure-Output Model
equilibrium exchange rate 29.2 Demand and Supply Shifts in Foreign Exchange Markets
equilibrium price 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 16.1 The Problem of Imperfect Information and Asymmetric Information
equilibrium quantity 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process
equity 17.2 How Households Supply Financial Capital
estate and gift tax 30.2 Taxation
estate tax 15.5 Government Policies to Reduce Income Inequality
Esther Duflo 32.2 Improving Countries’ Standards of Living
European Union 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
European Union (EU) 3.4 Price Ceilings and Price Floors
excess demand 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
excess reserves 28.5 Pitfalls for Monetary Policy
excess supply 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
exchange rate 19.4 Comparing GDP among Countries, Introduction to Exchange Rates and International Capital Flows, 31.2 Fiscal Policy and the Trade Balance
exchange rates 28.5 Pitfalls for Monetary Policy
excise tax 30.2 Taxation
exclusive dealing 11.2 Regulating Anticompetitive Behavior
exit 8.3 Entry and Exit Decisions in the Long Run
expansionary fiscal policy 25.3 The Phillips Curve, 30.4 Using Fiscal Policy to Fight Recession, Unemployment, and Inflation
expansionary monetary policy 28.4 Monetary Policy and Economic Outcomes, 29.4 Exchange Rate Policies, 31.4 Fiscal Policy, Investment, and Economic Growth, 32.3 Causes of Unemployment around the World
expected inflation 26.2 The Policy Implications of the Neoclassical Perspective
expected rate of return 17.2 How Households Supply Financial Capital
expenditure multiplier 25.2 The Building Blocks of Keynesian Analysis
expenditure-output model Appendix D The Expenditure-Output Model
Explicit costs 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit
export 33.2 What Happens When a Country Has an Absolute Advantage in All Goods
Exports 1.4 How To Organize Economies: An Overview of Economic Systems, 23.1 Measuring Trade Balances, 24.2 Building a Model of Aggregate Demand and Aggregate Supply, 25.1 Aggregate Demand in Keynesian Analysis, 29.3 Macroeconomic Effects of Exchange Rates
exports of goods and services as a percentage of GDP 23.2 Trade Balances in Historical and International Context
external costs 12.1 The Economics of Pollution
externality 12.1 The Economics of Pollution
F
face value 17.2 How Households Supply Financial Capital
Factor payments 7.3 Costs in the Short Run
factors of production 3.2 Shifts in Demand and Supply for Goods and Services
Federal Deposit Insurance Corporation (FDIC) 17.2 How Households Supply Financial Capital, 28.2 Bank Regulation
federal funds rate 28.4 Monetary Policy and Economic Outcomes
Federal Open Market Committee (FOMC) 28.3 How a Central Bank Executes Monetary Policy
Federal Reserve 28.1 The Federal Reserve Banking System and Central Banks, 28.2 Bank Regulation, 28.5 Pitfalls for Monetary Policy, 31.4 Fiscal Policy, Investment, and Economic Growth, 32.5 Balance of Trade Concerns
Federal Reserve Bank 27.2 Measuring Money: Currency, M1, and M2
Federal Reserve Economic Data (FRED) Introduction to Financial Markets, 21.2 Patterns of Unemployment, 29.1 How the Foreign Exchange Market Works, 29.4 Exchange Rate Policies
Federal Trade Commission 10.2 Oligopoly
Federal Trade Commission (FTC) 16.1 The Problem of Imperfect Information and Asymmetric Information
fee-for-service 16.2 Insurance and Imperfect Information
fiat money 27.1 Defining Money by Its Functions
final goods and services 19.1 Measuring the Size of the Economy: Gross Domestic Product
financial capital 4.2 Demand and Supply in Financial Markets, 23.3 Trade Balances and Flows of Financial Capital, 23.4 The National Saving and Investment Identity, 28.5 Pitfalls for Monetary Policy, 31.1 How Government Borrowing Affects Investment and the Trade Balance
financial capital market 16.1 The Problem of Imperfect Information and Asymmetric Information, 23.4 The National Saving and Investment Identity
financial capital markets 16.1 The Problem of Imperfect Information and Asymmetric Information, Introduction to Financial Markets, 30.6 Practical Problems with Discretionary Fiscal Policy, 31.1 How Government Borrowing Affects Investment and the Trade Balance
financial intermediary 17.2 How Households Supply Financial Capital, 27.3 The Role of Banks
firm 2.2 The Production Possibilities Frontier and Social Choices, 3.2 Shifts in Demand and Supply for Goods and Services, Introduction to Production, Costs, and Industry Structure, 10.1 Monopolistic Competition, 10.2 Oligopoly, 13.1 Investments in Innovation, 17.1 How Businesses Raise Financial Capital, 18.3 Flaws in the Democratic System of Government
firms 10.1 Monopolistic Competition, 29.1 How the Foreign Exchange Market Works
first rule of labor markets 14.1 The Theory of Labor Markets
fiscal policy 1.2 Microeconomics and Macroeconomics, Introduction to Government Budgets and Fiscal Policy, 32.3 Causes of Unemployment around the World
fixed 7.2 Production in the Short Run
Fixed inputs 7.2 Production in the Short Run
floating exchange rate 29.4 Exchange Rate Policies
Foreign direct investment (FDI) 29.1 How the Foreign Exchange Market Works
foreign exchange market 29.1 How the Foreign Exchange Market Works, 29.2 Demand and Supply Shifts in Foreign Exchange Markets
foreign financial capital 23.4 The National Saving and Investment Identity
foreign investment capital 29.3 Macroeconomic Effects of Exchange Rates
fossil fuels 12.5 International Environmental Issues
Francine Blau 14.5 Employment Discrimination
free rider 13.3 Public Goods
free trade 34.3 Arguments in Support of Restricting Imports
free trade agreements 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
frictional unemployment 21.4 What Causes Changes in Unemployment over the Long Run
full-employment GDP 24.2 Building a Model of Aggregate Demand and Aggregate Supply
function Appendix A The Use of Mathematics in Principles of Economics
fungible 6.3 Behavioral Economics: An Alternative Framework for Consumer Choice
G
gain from trade 33.1 Absolute and Comparative Advantage
game theory 10.2 Oligopoly
Gary Becker 14.5 Employment Discrimination
GDP 29.1 How the Foreign Exchange Market Works, 29.2 Demand and Supply Shifts in Foreign Exchange Markets
GDP deflator 19.2 Adjusting Nominal Values to Real Values, 22.2 How to Measure Changes in the Cost of Living
GDP per capita 19.4 Comparing GDP among Countries, 19.5 How Well GDP Measures the Well-Being of Society, 20.3 Components of Economic Growth, 24.3 Shifts in Aggregate Supply, 32.1 The Diversity of Countries and Economies across the World
General Agreement on Tariffs and Trade (GATT) 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
George Psacharopoulos 13.1 Investments in Innovation
globalization 1.4 How To Organize Economies: An Overview of Economic Systems, 11.1 Corporate Mergers, 15.4 Income Inequality: Measurement and Causes, Introduction to International Trade, 34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
good 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
goods and services market 1.3 How Economists Use Theories and Models to Understand Economic Issues
Great Depression 19.3 Tracking Real GDP over Time, 24.1 Macroeconomic Perspectives on Demand and Supply, Introduction to the Neoclassical Perspective, 26.3 Balancing Keynesian and Neoclassical Models, Introduction to International Trade
Great Recession 15.3 The Safety Net, 19.1 Measuring the Size of the Economy: Gross Domestic Product, 19.3 Tracking Real GDP over Time, 22.3 How the U.S. and Other Countries Experience Inflation, Introduction to the Neoclassical Perspective
gross domestic product (GDP) 12.6 The Tradeoff between Economic Output and Environmental Protection, 19.1 Measuring the Size of the Economy: Gross Domestic Product
Gross domestic product (GDP) 1.4 How To Organize Economies: An Overview of Economic Systems
gross national product (GNP) 19.1 Measuring the Size of the Economy: Gross Domestic Product
growth consensus 32.2 Improving Countries’ Standards of Living
growth rate Appendix A The Use of Mathematics in Principles of Economics
H
hard peg 29.4 Exchange Rate Policies
Head Start program 31.4 Fiscal Policy, Investment, and Economic Growth
Health Care for America Now (HCAN) 18.2 Special Interest Politics
health maintenance organization (HMO) 16.2 Insurance and Imperfect Information
hedge 29.1 How the Foreign Exchange Market Works
Herfindahl-Hirschman Index (HHI) 11.1 Corporate Mergers
hidden unemployment 21.1 How Economists Define and Compute Unemployment Rate
High-income countries 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers, 34.3 Arguments in Support of Restricting Imports
high-yield 17.2 How Households Supply Financial Capital
Human capital 20.2 Labor Productivity and Economic Growth, 20.3 Components of Economic Growth, 26.1 The Building Blocks of Neoclassical Analysis, 30.7 The Question of a Balanced Budget, 31.4 Fiscal Policy, Investment, and Economic Growth, 32.2 Improving Countries’ Standards of Living
hyperinflation 22.3 How the U.S. and Other Countries Experience Inflation
I
immigrants 14.6 Immigration
imperfect information 16.1 The Problem of Imperfect Information and Asymmetric Information
imperfectly competitive Introduction to Monopolistic Competition and Oligopoly
implementation lag 30.6 Practical Problems with Discretionary Fiscal Policy
implicit contract 21.3 What Causes Changes in Unemployment over the Short Run
Implicit costs 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit
import quotas 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
Imports 1.4 How To Organize Economies: An Overview of Economic Systems, 23.1 Measuring Trade Balances, 24.2 Building a Model of Aggregate Demand and Aggregate Supply, 25.1 Aggregate Demand in Keynesian Analysis, 33.2 What Happens When a Country Has an Absolute Advantage in All Goods
Income 15.1 Drawing the Poverty Line, 15.5 Government Policies to Reduce Income Inequality
income effect 6.2 How Changes in Income and Prices Affect Consumption Choices, Appendix B Indifference Curves
income elasticity of demand 5.4 Elasticity in Areas Other Than Price
income payments 23.1 Measuring Trade Balances
increasing-cost industry 8.3 Entry and Exit Decisions in the Long Run
index fund 17.2 How Households Supply Financial Capital
index number 22.1 Tracking Inflation
indexed 22.5 Indexing and Its Limitations
indifference curve Appendix B Indifference Curves
individual income tax 30.2 Taxation
Industrial Revolution 20.1 The Relatively Recent Arrival of Economic Growth
inelastic demand 5.1 Price Elasticity of Demand and Price Elasticity of Supply
inelastic supply 5.1 Price Elasticity of Demand and Price Elasticity of Supply
inequality 15.1 Drawing the Poverty Line
infant industry argument 32.5 Balance of Trade Concerns, 34.3 Arguments in Support of Restricting Imports
inferior good 3.2 Shifts in Demand and Supply for Goods and Services, 5.4 Elasticity in Areas Other Than Price, 6.2 How Changes in Income and Prices Affect Consumption Choices
Infinite elasticity 5.2 Polar Cases of Elasticity and Constant Elasticity
Inflation Introduction to Inflation, Introduction to the Aggregate Supply–Aggregate Demand Model, 24.5 How the AD/AS Model Incorporates Growth, Unemployment, and Inflation, 25.3 The Phillips Curve, Introduction to Money and Banking, 28.1 The Federal Reserve Banking System and Central Banks, 32.4 Causes of Inflation in Various Countries and Regions
inflation rate 28.4 Monetary Policy and Economic Outcomes
inflation targeting 28.5 Pitfalls for Monetary Policy
inflationary gap 25.1 Aggregate Demand in Keynesian Analysis, Appendix D The Expenditure-Output Model
infrastructure 20.3 Components of Economic Growth, 30.7 The Question of a Balanced Budget
initial public offering (IPO) 17.1 How Businesses Raise Financial Capital
innovation 20.2 Labor Productivity and Economic Growth
inputs 3.2 Shifts in Demand and Supply for Goods and Services
insider-outsider model 21.3 What Causes Changes in Unemployment over the Short Run
Insurance 16.2 Insurance and Imperfect Information
intellectual property 9.1 How Monopolies Form: Barriers to Entry, 13.2 How Governments Can Encourage Innovation
interbank market 29.1 How the Foreign Exchange Market Works
Interest and dividends 7.3 Costs in the Short Run
interest rate 4.2 Demand and Supply in Financial Markets, 25.1 Aggregate Demand in Keynesian Analysis, Appendix C Present Discounted Value
interest rates 28.1 The Federal Reserve Banking System and Central Banks, 28.4 Monetary Policy and Economic Outcomes
intermediate goods 19.1 Measuring the Size of the Economy: Gross Domestic Product
intermediate zone 24.6 Keynes’ Law and Say’s Law in the AD/AS Model
international capital flows 29.4 Exchange Rate Policies
international externalities 12.5 International Environmental Issues
international financial flows 29.4 Exchange Rate Policies
International Price Index 22.2 How to Measure Changes in the Cost of Living
international trade 29.3 Macroeconomic Effects of Exchange Rates, 33.3 Intra-Industry Trade between Similar Economies, 34.5 The Tradeoffs of Trade Policy
International Trade Commission (ITC) 18.3 Flaws in the Democratic System of Government
intertemporal choices 2.3 Confronting Objections to the Economic Approach
intertemporal decision making 4.2 Demand and Supply in Financial Markets
intra-industry trade 33.3 Intra-Industry Trade between Similar Economies
invention 20.2 Labor Productivity and Economic Growth
inventories 19.1 Measuring the Size of the Economy: Gross Domestic Product
Investment demand 19.1 Measuring the Size of the Economy: Gross Domestic Product
Investment expenditure 19.1 Measuring the Size of the Economy: Gross Domestic Product, 25.1 Aggregate Demand in Keynesian Analysis
investment function Appendix D The Expenditure-Output Model
investment income 23.3 Trade Balances and Flows of Financial Capital
invisible hand 2.3 Confronting Objections to the Economic Approach
involuntary unemployment 21.3 What Causes Changes in Unemployment over the Short Run
J
James Tobin 29.4 Exchange Rate Policies
Jan Luiten van Zanden 20.1 The Relatively Recent Arrival of Economic Growth
Jean-Baptiste Say 24.1 Macroeconomic Perspectives on Demand and Supply
Joan Robinson 18.3 Flaws in the Democratic System of Government
John Maynard Keynes 1.3 How Economists Use Theories and Models to Understand Economic Issues, 24.1 Macroeconomic Perspectives on Demand and Supply, 26.1 The Building Blocks of Neoclassical Analysis, 30.6 Practical Problems with Discretionary Fiscal Policy
junk bonds 17.2 How Households Supply Financial Capital
K
key input 5.3 Elasticity and Pricing
Keynes’ law 24.1 Macroeconomic Perspectives on Demand and Supply, 24.6 Keynes’ Law and Say’s Law in the AD/AS Model
Keynesian aggregate supply curve 28.4 Monetary Policy and Economic Outcomes
Keynesian cross diagram Appendix D The Expenditure-Output Model
Keynesian economic model 32.3 Causes of Unemployment around the World
Keynesian economics 26.1 The Building Blocks of Neoclassical Analysis, 26.3 Balancing Keynesian and Neoclassical Models
Keynesian macroeconomic policy 30.7 The Question of a Balanced Budget
Keynesian zone 24.6 Keynes’ Law and Say’s Law in the AD/AS Model
kinked demand curve 10.2 Oligopoly
L
Labor 7.2 Production in the Short Run
labor force participation rate 21.1 How Economists Define and Compute Unemployment Rate
labor market 1.3 How Economists Use Theories and Models to Understand Economic Issues, 4.1 Demand and Supply at Work in Labor Markets, 16.1 The Problem of Imperfect Information and Asymmetric Information, 21.3 What Causes Changes in Unemployment over the Short Run
labor markets 15.4 Income Inequality: Measurement and Causes, 22.4 The Confusion Over Inflation
Labor productivity 20.2 Labor Productivity and Economic Growth
labor-leisure budget constraint 15.2 The Poverty Trap
labor-leisure diagram Appendix B Indifference Curves
Laurence Kahn 14.5 Employment Discrimination
law of demand 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 4.2 Demand and Supply in Financial Markets
Law of Diminishing Marginal Product 7.2 Production in the Short Run
law of diminishing marginal utility 2.1 How Individuals Make Choices Based on Their Budget Constraint
law of diminishing returns 20.4 Economic Convergence
law of supply 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
legislative lag 30.6 Practical Problems with Discretionary Fiscal Policy
lender of last resort 28.2 Bank Regulation
level of trade 23.6 The Difference between Level of Trade and the Trade Balance
leverage cycle 28.5 Pitfalls for Monetary Policy
leviathan effect 7.5 Costs in the Long Run
liability 27.3 The Role of Banks
line graphs Appendix A The Use of Mathematics in Principles of Economics
liquidity 17.2 How Households Supply Financial Capital, 27.2 Measuring Money: Currency, M1, and M2
living wage 4.1 Demand and Supply at Work in Labor Markets
loan market 27.3 The Role of Banks
lobbyists 18.2 Special Interest Politics
Logrolling 18.2 Special Interest Politics
long run 7.2 Production in the Short Run
long run aggregate supply (LRAS) curve 24.2 Building a Model of Aggregate Demand and Aggregate Supply
long-run average cost (LRAC) curve 7.5 Costs in the Long Run
long-run equilibrium 8.3 Entry and Exit Decisions in the Long Run
loose monetary policy 28.4 Monetary Policy and Economic Outcomes
Lorenz curve 15.4 Income Inequality: Measurement and Causes
loss aversion 6.3 Behavioral Economics: An Alternative Framework for Consumer Choice
low-income countries 21.2 Patterns of Unemployment, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers, 34.3 Arguments in Support of Restricting Imports
M
M1 28.5 Pitfalls for Monetary Policy
M1 money supply 27.2 Measuring Money: Currency, M1, and M2
M2 28.5 Pitfalls for Monetary Policy
M2 money supply 27.2 Measuring Money: Currency, M1, and M2
macro economy 21.3 What Causes Changes in Unemployment over the Short Run
macroeconomic externality 25.2 The Building Blocks of Keynesian Analysis
Macroeconomics 1.2 Microeconomics and Macroeconomics
marginal analysis 2.1 How Individuals Make Choices Based on Their Budget Constraint
marginal benefits 12.4 The Benefits and Costs of U.S. Environmental Laws
marginal cost 7.3 Costs in the Short Run, 7.3 Costs in the Short Run, 8.2 How Perfectly Competitive Firms Make Output Decisions, 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price, 11.3 Regulating Natural Monopolies
marginal cost curve 12.4 The Benefits and Costs of U.S. Environmental Laws
marginal cost curves 12.3 Market-Oriented Environmental Tools
marginal cost of labor 14.2 Wages and Employment in an Imperfectly Competitive Labor Market
marginal product 7.2 Production in the Short Run
Marginal profit 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
marginal propensity to consume (MPC) Appendix D The Expenditure-Output Model
marginal propensity to import (MPI) Appendix D The Expenditure-Output Model
marginal propensity to save (MPS) Appendix D The Expenditure-Output Model
marginal rate of substitution Appendix B Indifference Curves
marginal revenue 8.2 How Perfectly Competitive Firms Make Output Decisions, 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
marginal tax rates 30.2 Taxation
marginal utility 6.1 Consumption Choices, Appendix B Indifference Curves
Marginal utility per dollar 6.1 Consumption Choices
market 1.4 How To Organize Economies: An Overview of Economic Systems, 11.1 Corporate Mergers, 16.2 Insurance and Imperfect Information
market economy 1.4 How To Organize Economies: An Overview of Economic Systems, 2.2 The Production Possibilities Frontier and Social Choices, 13.1 Investments in Innovation, 21.4 What Causes Changes in Unemployment over the Long Run, 22.4 The Confusion Over Inflation
market failure 12.1 The Economics of Pollution
market price 10.1 Monopolistic Competition
market share 11.1 Corporate Mergers
market structure Introduction to Perfect Competition
marketable permit program 12.3 Market-Oriented Environmental Tools
maturity date 17.2 How Households Supply Financial Capital
maximizing utility 6.1 Consumption Choices
median Appendix A The Use of Mathematics in Principles of Economics
median voter theory 18.3 Flaws in the Democratic System of Government
Medicaid 15.1 Drawing the Poverty Line, 15.3 The Safety Net
Medicare 18.2 Special Interest Politics
medium of exchange 27.1 Defining Money by Its Functions
menu costs 25.2 The Building Blocks of Keynesian Analysis
merchandise trade balance 23.1 Measuring Trade Balances
merged currency 29.4 Exchange Rate Policies
merger 11.1 Corporate Mergers
Michael S. Clune 14.6 Immigration
Microeconomics 1.2 Microeconomics and Macroeconomics
Midpoint Formula 5.1 Price Elasticity of Demand and Price Elasticity of Supply
Midpoint Method 5.1 Price Elasticity of Demand and Price Elasticity of Supply, 5.1 Price Elasticity of Demand and Price Elasticity of Supply
Milton Friedman 26.2 The Policy Implications of the Neoclassical Perspective, 28.5 Pitfalls for Monetary Policy, 29.4 Exchange Rate Policies
minimum wage 4.1 Demand and Supply at Work in Labor Markets, 21.3 What Causes Changes in Unemployment over the Short Run, 22.4 The Confusion Over Inflation, 34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
model 1.3 How Economists Use Theories and Models to Understand Economic Issues
modern economic growth 20.1 The Relatively Recent Arrival of Economic Growth
Mollie Orshansky 15.1 Drawing the Poverty Line
monetary policy 1.2 Microeconomics and Macroeconomics, 28.1 The Federal Reserve Banking System and Central Banks, 28.3 How a Central Bank Executes Monetary Policy, 29.4 Exchange Rate Policies
money 27.1 Defining Money by Its Functions
money market funds 27.2 Measuring Money: Currency, M1, and M2
money multiplier 28.5 Pitfalls for Monetary Policy
money multiplier formula 27.4 How Banks Create Money
money-back guarantee 16.1 The Problem of Imperfect Information and Asymmetric Information
monopolistic competition Introduction to Monopolistic Competition and Oligopoly
monopoly Introduction to a Monopoly, 11.2 Regulating Anticompetitive Behavior
monopsony 14.2 Wages and Employment in an Imperfectly Competitive Labor Market
Moody’s 17.2 How Households Supply Financial Capital
Moral hazard 16.2 Insurance and Imperfect Information
multiplier effect Appendix D The Expenditure-Output Model
municipal bond 17.1 How Businesses Raise Financial Capital
mutual funds 17.2 How Households Supply Financial Capital
N
Nasdaq 28.5 Pitfalls for Monetary Policy
National Academy of Engineering 13.2 How Governments Can Encourage Innovation
National Academy of Sciences 13.2 How Governments Can Encourage Innovation
National Association of Insurance Commissioners 16.2 Insurance and Imperfect Information
National Bureau of Economic Research 32.5 Balance of Trade Concerns
National Bureau of Economic Research (NBER) 19.3 Tracking Real GDP over Time
National Credit Union Administration (NCUA) 28.2 Bank Regulation
national debt 30.3 Federal Deficits and the National Debt
National Education Association 14.3 Market Power on the Supply Side of Labor Markets: Unions
national income 19.1 Measuring the Size of the Economy: Gross Domestic Product, 19.1 Measuring the Size of the Economy: Gross Domestic Product, Appendix D The Expenditure-Output Model
National Institutes of Health 13.2 How Governments Can Encourage Innovation
national interest argument 34.3 Arguments in Support of Restricting Imports
National Labor Relations Act 14.3 Market Power on the Supply Side of Labor Markets: Unions
national saving and investment identity 23.4 The National Saving and Investment Identity
National Venture Capital Association 17.1 How Businesses Raise Financial Capital
natural monopoly 10.2 Oligopoly, 11.3 Regulating Natural Monopolies
natural rate of unemployment 21.4 What Causes Changes in Unemployment over the Long Run, 24.5 How the AD/AS Model Incorporates Growth, Unemployment, and Inflation, 26.2 The Policy Implications of the Neoclassical Perspective
Natural Resources (Land and Raw Materials) 7.2 Production in the Short Run
negative externalities 18.2 Special Interest Politics
negative externality 12.1 The Economics of Pollution
negative slope Appendix A The Use of Mathematics in Principles of Economics
neoclassical determinants of growth 32.1 The Diversity of Countries and Economies across the World
neoclassical economists 24.1 Macroeconomic Perspectives on Demand and Supply
neoclassical model 28.5 Pitfalls for Monetary Policy
neoclassical perspective 26.1 The Building Blocks of Neoclassical Analysis
neoclassical zone 24.6 Keynes’ Law and Say’s Law in the AD/AS Model
net national product (NNP) 19.1 Measuring the Size of the Economy: Gross Domestic Product
net worth 27.3 The Role of Banks, 28.2 Bank Regulation
nominal GDP 19.2 Adjusting Nominal Values to Real Values, 28.5 Pitfalls for Monetary Policy
nominal interest rate 22.4 The Confusion Over Inflation, 28.5 Pitfalls for Monetary Policy
nominal value 19.2 Adjusting Nominal Values to Real Values
non-rival 13.3 Public Goods
nondurable goods 19.1 Measuring the Size of the Economy: Gross Domestic Product
nonexcludable 13.3 Public Goods
Nontariff barriers 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
normal good 3.2 Shifts in Demand and Supply for Goods and Services
normal goods 5.4 Elasticity in Areas Other Than Price, 6.2 How Changes in Income and Prices Affect Consumption Choices
normative statements 2.3 Confronting Objections to the Economic Approach
North American Free Trade Agreement (NAFTA) 32.5 Balance of Trade Concerns, 34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions, 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
O
occupational licenses 16.1 The Problem of Imperfect Information and Asymmetric Information
oligopoly Introduction to Monopolistic Competition and Oligopoly, 10.2 Oligopoly
open market operations 28.3 How a Central Bank Executes Monetary Policy
opportunity cost 2.1 How Individuals Make Choices Based on Their Budget Constraint, Introduction to Unemployment, 29.4 Exchange Rate Policies, 33.1 Absolute and Comparative Advantage, 33.2 What Happens When a Country Has an Absolute Advantage in All Goods, 34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
opportunity set Appendix B Indifference Curves
Organization of Petroleum Exporting Countries (OPEC) 10.2 Oligopoly
out of the labor force 21.1 How Economists Define and Compute Unemployment Rate
output 10.2 Oligopoly
Oxfam International 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
P
partnership 17.1 How Businesses Raise Financial Capital
patent 9.1 How Monopolies Form: Barriers to Entry, 13.2 How Governments Can Encourage Innovation
Patient Protection and Affordable Care Act (PPACA) 16.2 Insurance and Imperfect Information
Patient Protection and Affordable Care Act (PPACA) Introduction to Information, Risk, and Insurance
payment system 27.3 The Role of Banks
payroll tax 30.2 Taxation
peak 19.3 Tracking Real GDP over Time
Pension insurance 16.2 Insurance and Imperfect Information
pensions 22.4 The Confusion Over Inflation
per capita GDP 23.5 The Pros and Cons of Trade Deficits and Surpluses
Per capita GDP 22.1 Tracking Inflation
percentage change 22.1 Tracking Inflation
perfect competition 8.1 Perfect Competition and Why It Matters
perfect elasticity 5.2 Polar Cases of Elasticity and Constant Elasticity
perfect inelasticity 5.2 Polar Cases of Elasticity and Constant Elasticity
perfectly competitive firm 8.1 Perfect Competition and Why It Matters, 8.2 How Perfectly Competitive Firms Make Output Decisions, 8.3 Entry and Exit Decisions in the Long Run, 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
Perfectly Competitive Labor Market 14.1 The Theory of Labor Markets
perfectly elastic 10.1 Monopolistic Competition
Pew Research Center for People and the Press 3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process
Phillips curve 25.3 The Phillips Curve, 26.2 The Policy Implications of the Neoclassical Perspective
physical capital 20.3 Components of Economic Growth, 31.4 Fiscal Policy, Investment, and Economic Growth, 32.2 Improving Countries’ Standards of Living
Physical capital per person 26.1 The Building Blocks of Neoclassical Analysis
pie chart Appendix A The Use of Mathematics in Principles of Economics
pie graph Appendix A The Use of Mathematics in Principles of Economics
Pierre Mohnen 20.3 Components of Economic Growth
pollution charge 12.3 Market-Oriented Environmental Tools
pork-barrel spending 18.2 Special Interest Politics
portfolio investment 29.1 How the Foreign Exchange Market Works, 29.4 Exchange Rate Policies
positive externalities 13.1 Investments in Innovation
positive externality 12.1 The Economics of Pollution
positive slope Appendix A The Use of Mathematics in Principles of Economics
positive statements 2.3 Confronting Objections to the Economic Approach
potential GDP 24.2 Building a Model of Aggregate Demand and Aggregate Supply, 25.1 Aggregate Demand in Keynesian Analysis, 25.3 The Phillips Curve, 26.1 The Building Blocks of Neoclassical Analysis, 28.4 Monetary Policy and Economic Outcomes, 28.5 Pitfalls for Monetary Policy, Appendix D The Expenditure-Output Model
poverty 15.1 Drawing the Poverty Line
poverty line 15.1 Drawing the Poverty Line
poverty rate 15.1 Drawing the Poverty Line
poverty trap 15.2 The Poverty Trap
predatory pricing 9.1 How Monopolies Form: Barriers to Entry, 11.2 Regulating Anticompetitive Behavior
premiums 16.2 Insurance and Imperfect Information
present discounted value (PDV) Appendix C Present Discounted Value
present value 17.2 How Households Supply Financial Capital
price 2.1 How Individuals Make Choices Based on Their Budget Constraint, 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 3.2 Shifts in Demand and Supply for Goods and Services, 10.2 Oligopoly
price cap regulation 11.3 Regulating Natural Monopolies
price ceiling 3.4 Price Ceilings and Price Floors, 3.5 Demand, Supply, and Efficiency
price control 3.5 Demand, Supply, and Efficiency
price controls 3.4 Price Ceilings and Price Floors, 4.3 The Market System as an Efficient Mechanism for Information, 18.2 Special Interest Politics
Price elasticity 5.1 Price Elasticity of Demand and Price Elasticity of Supply
price elasticity of demand 5.1 Price Elasticity of Demand and Price Elasticity of Supply
price elasticity of supply 5.1 Price Elasticity of Demand and Price Elasticity of Supply
price floor 3.4 Price Ceilings and Price Floors, 3.5 Demand, Supply, and Efficiency
price level 22.1 Tracking Inflation
price taker 8.1 Perfect Competition and Why It Matters
price takers Introduction to Monopolistic Competition and Oligopoly
prisoner’s dilemma 10.2 Oligopoly
private benefits 13.1 Investments in Innovation
private company 17.1 How Businesses Raise Financial Capital
private enterprise 1.4 How To Organize Economies: An Overview of Economic Systems
private insurance 16.2 Insurance and Imperfect Information
Private markets 12.1 The Economics of Pollution, 22.5 Indexing and Its Limitations
private rates of return 13.1 Investments in Innovation
Producer Price Index (PPI) 22.2 How to Measure Changes in the Cost of Living
producer surplus 3.5 Demand, Supply, and Efficiency, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
product differentiation 10.1 Monopolistic Competition
production Introduction to Production, Costs, and Industry Structure
production function 7.2 Production in the Short Run, 20.2 Labor Productivity and Economic Growth
production possibilities frontier (PPF) 2.2 The Production Possibilities Frontier and Social Choices
production possibility frontier (PPF) 12.6 The Tradeoff between Economic Output and Environmental Protection, 33.1 Absolute and Comparative Advantage
production technologies 7.5 Costs in the Long Run
Productive efficiency 2.2 The Production Possibilities Frontier and Social Choices, 8.4 Efficiency in Perfectly Competitive Markets, 10.1 Monopolistic Competition, 12 Key Concepts and Summary
productivity 33.2 What Happens When a Country Has an Absolute Advantage in All Goods
Productivity growth 20.2 Labor Productivity and Economic Growth, 24.3 Shifts in Aggregate Supply
Profit 7.3 Costs in the Short Run, 8.2 How Perfectly Competitive Firms Make Output Decisions
profit margin 7.3 Costs in the Short Run, 8.2 How Perfectly Competitive Firms Make Output Decisions
profit-maximizing 10.1 Monopolistic Competition
profits 10.2 Oligopoly
progressive tax 30.2 Taxation
progressive tax system 15.5 Government Policies to Reduce Income Inequality
property rights 12.3 Market-Oriented Environmental Tools, 20.1 The Relatively Recent Arrival of Economic Growth
proportional tax 30.2 Taxation
protectionism 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers, 34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
public company 17.1 How Businesses Raise Financial Capital
public good 13.3 Public Goods
Public policy 15.5 Government Policies to Reduce Income Inequality
purchasing power parity 32.1 The Diversity of Countries and Economies across the World
purchasing power parity (PPP) 19.4 Comparing GDP among Countries, 29.2 Demand and Supply Shifts in Foreign Exchange Markets
Q
quality/new goods bias 22.2 How to Measure Changes in the Cost of Living
quantitative easing (QE) 28.4 Monetary Policy and Economic Outcomes
quantity demanded 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 10.2 Oligopoly, 29.4 Exchange Rate Policies
quantity supplied 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 29.4 Exchange Rate Policies
quintiles 15.4 Income Inequality: Measurement and Causes
quotas 18.3 Flaws in the Democratic System of Government
R
race to the bottom 34.3 Arguments in Support of Restricting Imports
rational expectations 26.1 The Building Blocks of Neoclassical Analysis
rational ignorance 18.1 Voter Participation and Costs of Elections
Raw materials prices 7.3 Costs in the Short Run
real GDP 19.2 Adjusting Nominal Values to Real Values, Introduction to the International Trade and Capital Flows, 23.5 The Pros and Cons of Trade Deficits and Surpluses, 25.1 Aggregate Demand in Keynesian Analysis, 26.1 The Building Blocks of Neoclassical Analysis, 28.5 Pitfalls for Monetary Policy, 28.5 Pitfalls for Monetary Policy, Appendix D The Expenditure-Output Model
real interest rate 22.4 The Confusion Over Inflation
real value 19.2 Adjusting Nominal Values to Real Values
recession 19.3 Tracking Real GDP over Time, 21.2 Patterns of Unemployment, 24.1 Macroeconomic Perspectives on Demand and Supply, 24.4 Shifts in Aggregate Demand, 25.2 The Building Blocks of Keynesian Analysis, 28.5 Pitfalls for Monetary Policy, 31.2 Fiscal Policy and the Trade Balance, 32.3 Causes of Unemployment around the World
recessionary gap 25.1 Aggregate Demand in Keynesian Analysis, Appendix D The Expenditure-Output Model
recognition lag 30.6 Practical Problems with Discretionary Fiscal Policy
Redistribution 15.5 Government Policies to Reduce Income Inequality
redistributions 22.4 The Confusion Over Inflation, 22.4 The Confusion Over Inflation
redlining 14.5 Employment Discrimination
regressive tax 30.2 Taxation
regulatory capture 11.4 The Great Deregulation Experiment, 18.2 Special Interest Politics
relative wage coordination argument 21.3 What Causes Changes in Unemployment over the Short Run
Rent 7.3 Costs in the Short Run
reserve requirement 28.3 How a Central Bank Executes Monetary Policy
reserves 27.3 The Role of Banks, 28.2 Bank Regulation, 28.3 How a Central Bank Executes Monetary Policy, 29.4 Exchange Rate Policies
restrictive practices 11.2 Regulating Anticompetitive Behavior
Retirement insurance 16.2 Insurance and Imperfect Information
revenue 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit, 30.3 Federal Deficits and the National Debt
Ricardian equivalence 31.3 How Government Borrowing Affects Private Saving
Richard Easterlin 20.1 The Relatively Recent Arrival of Economic Growth
Risk 17.2 How Households Supply Financial Capital
risk group 16.2 Insurance and Imperfect Information
Robert Shiller 22.4 The Confusion Over Inflation
Robert Solow 26.3 Balancing Keynesian and Neoclassical Models
rule of law 20.1 The Relatively Recent Arrival of Economic Growth
S
safety net 15.3 The Safety Net
salary 4.1 Demand and Supply at Work in Labor Markets
Sarbanes-Oxley Act 11.4 The Great Deregulation Experiment
savings account 17.2 How Households Supply Financial Capital
savings deposits 27.2 Measuring Money: Currency, M1, and M2
Say’s law 24.1 Macroeconomic Perspectives on Demand and Supply, 24.6 Keynes’ Law and Say’s Law in the AD/AS Model
Scarcity 1.1 What Is Economics, and Why Is It Important?, 2.3 Confronting Objections to the Economic Approach
Sebastian Edwards 32.5 Balance of Trade Concerns
Securitization 27.3 The Role of Banks
service 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
service contract 16.1 The Problem of Imperfect Information and Asymmetric Information
Service Employees International Union 14.3 Market Power on the Supply Side of Labor Markets: Unions
services 19.1 Measuring the Size of the Economy: Gross Domestic Product, 25.1 Aggregate Demand in Keynesian Analysis
shareholders 17.1 How Businesses Raise Financial Capital
shares 17.1 How Businesses Raise Financial Capital
Sherman Antitrust Act 11.1 Corporate Mergers
shift in demand 3.2 Shifts in Demand and Supply for Goods and Services
shift in supply 3.2 Shifts in Demand and Supply for Goods and Services
short run 7.2 Production in the Short Run
short run aggregate supply (SRAS) curve 24.2 Building a Model of Aggregate Demand and Aggregate Supply
short-run average cost (SRAC) curves 7.5 Costs in the Long Run
shortage 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
shortages 22.4 The Confusion Over Inflation
Simple interest 17.3 How to Accumulate Personal Wealth
slope 2.2 The Production Possibilities Frontier and Social Choices, Appendix A The Use of Mathematics in Principles of Economics
smart card 27.2 Measuring Money: Currency, M1, and M2
social benefits 13.1 Investments in Innovation
social costs 12.1 The Economics of Pollution
social rate of return 13.1 Investments in Innovation
Social Security Indexing Act of 1972 22.5 Indexing and Its Limitations
social surplus 3.5 Demand, Supply, and Efficiency
soft peg 29.4 Exchange Rate Policies
sole proprietorship 17.1 How Businesses Raise Financial Capital
special economic zones (SEZ) 20.3 Components of Economic Growth
Special interest groups 18.2 Special Interest Politics
Special Supplemental Food Program for Women, Infants and Children (WIC) 15.3 The Safety Net
specialization 1.1 What Is Economics, and Why Is It Important?, 33.1 Absolute and Comparative Advantage
spillovers 12.1 The Economics of Pollution
splitting up the value chain 33.3 Intra-Industry Trade between Similar Economies
stagflation 24.3 Shifts in Aggregate Supply, 25.3 The Phillips Curve
Standard & Poor’s 500 index 17.2 How Households Supply Financial Capital
standard of deferred payment 27.1 Defining Money by Its Functions
standard of living 19.5 How Well GDP Measures the Well-Being of Society
standardized employment budget 30.5 Automatic Stabilizers
standards of living 32.1 The Diversity of Countries and Economies across the World
sticky 21.3 What Causes Changes in Unemployment over the Short Run
sticky wages and prices 25.2 The Building Blocks of Keynesian Analysis
Stock 17.1 How Businesses Raise Financial Capital, 17.3 How to Accumulate Personal Wealth
stocks Appendix C Present Discounted Value
store of value 27.1 Defining Money by Its Functions
straight-line demand curve 5.1 Price Elasticity of Demand and Price Elasticity of Supply
structural unemployment 21.4 What Causes Changes in Unemployment over the Long Run
structures 19.1 Measuring the Size of the Economy: Gross Domestic Product
subprime loans 27.3 The Role of Banks
subsidies 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
substitute 3.2 Shifts in Demand and Supply for Goods and Services
substitution bias 22.2 How to Measure Changes in the Cost of Living
substitution effect 6.2 How Changes in Income and Prices Affect Consumption Choices, Appendix B Indifference Curves
sunk costs 2.1 How Individuals Make Choices Based on Their Budget Constraint, 7.3 Costs in the Short Run
Supplemental Nutrition Assistance Program (SNAP) 15.3 The Safety Net
supply 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 24.1 Macroeconomic Perspectives on Demand and Supply, Introduction to Exchange Rates and International Capital Flows
supply curve 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 3.2 Shifts in Demand and Supply for Goods and Services, 29.2 Demand and Supply Shifts in Foreign Exchange Markets, 31.4 Fiscal Policy, Investment, and Economic Growth, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
supply curves 11.1 Corporate Mergers
supply schedule 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
surplus 3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services, 23.1 Measuring Trade Balances, 31.1 How Government Borrowing Affects Investment and the Trade Balance
surpluses 22.4 The Confusion Over Inflation
T
T-account 27.3 The Role of Banks
tariff 18.2 Special Interest Politics
Tariffs 33.4 The Benefits of Reducing Barriers to International Trade, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
tax 24.4 Shifts in Aggregate Demand
tax incidence 5.3 Elasticity and Pricing
Technological change 20.2 Labor Productivity and Economic Growth
Technology 7.2 Production in the Short Run, 13.1 Investments in Innovation, 20.3 Components of Economic Growth, 32.2 Improving Countries’ Standards of Living
Temporary Assistance for Needy Families (TANF) 15.3 The Safety Net
The Land of Funny Money 22.4 The Confusion Over Inflation
the law of increasing opportunity cost 2.2 The Production Possibilities Frontier and Social Choices
theory 1.3 How Economists Use Theories and Models to Understand Economic Issues
thick market 16.1 The Problem of Imperfect Information and Asymmetric Information
thin market 16.1 The Problem of Imperfect Information and Asymmetric Information
tight monetary policy 28.4 Monetary Policy and Economic Outcomes
time deposits 27.2 Measuring Money: Currency, M1, and M2
time series Appendix A The Use of Mathematics in Principles of Economics
Tobin taxes 29.4 Exchange Rate Policies
total costs 8.2 How Perfectly Competitive Firms Make Output Decisions
total profit 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
total revenue 8.2 How Perfectly Competitive Firms Make Output Decisions, 9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
total surplus 3.5 Demand, Supply, and Efficiency
total utility 6.1 Consumption Choices
trade balance 19.1 Measuring the Size of the Economy: Gross Domestic Product
trade deficit 19.1 Measuring the Size of the Economy: Gross Domestic Product, Introduction to the International Trade and Capital Flows, 32.5 Balance of Trade Concerns
trade secrets 9.1 How Monopolies Form: Barriers to Entry
trade surplus 19.1 Measuring the Size of the Economy: Gross Domestic Product, Introduction to the International Trade and Capital Flows, 32.5 Balance of Trade Concerns
trademark 9.1 How Monopolies Form: Barriers to Entry
tradeoffs 2.3 Confronting Objections to the Economic Approach
traditional economy 1.4 How To Organize Economies: An Overview of Economic Systems
Transaction costs 27.3 The Role of Banks
Treasury bills 28.4 Monetary Policy and Economic Outcomes
Treasury bond 17.1 How Businesses Raise Financial Capital
Treasury bonds 28.4 Monetary Policy and Economic Outcomes
trough 19.3 Tracking Real GDP over Time
twin deficits 31.3 How Government Borrowing Affects Private Saving
Tying sales 11.2 Regulating Anticompetitive Behavior
Tyler Cowen 13.3 Public Goods
U
U.S. Census Bureau 3.2 Shifts in Demand and Supply for Goods and Services
U.S. Department of Commerce 23.1 Measuring Trade Balances
U.S. Department of the Treasury 17.1 How Businesses Raise Financial Capital
U.S. Patent and Trademark Office 20.3 Components of Economic Growth
underemployed 21.1 How Economists Define and Compute Unemployment Rate
underground economies 1.4 How To Organize Economies: An Overview of Economic Systems
unemployment Introduction to the Aggregate Supply–Aggregate Demand Model, 24.5 How the AD/AS Model Incorporates Growth, Unemployment, and Inflation, 25.3 The Phillips Curve, Introduction to Money and Banking, 28.1 The Federal Reserve Banking System and Central Banks, 32.3 Causes of Unemployment around the World
Unemployment insurance 16.2 Insurance and Imperfect Information
unemployment rate 21.1 How Economists Define and Compute Unemployment Rate, 28.4 Monetary Policy and Economic Outcomes
unilateral transfers 23.1 Measuring Trade Balances
unit of account 27.1 Defining Money by Its Functions
Unitary elasticities 5.1 Price Elasticity of Demand and Price Elasticity of Supply
usury laws 4.2 Demand and Supply in Financial Markets
utility 2.1 How Individuals Make Choices Based on Their Budget Constraint, 6.1 Consumption Choices, Appendix B Indifference Curves
utility maximizing 16.1 The Problem of Imperfect Information and Asymmetric Information
utility-maximizing 18.1 Voter Participation and Costs of Elections
utility-maximizing choice 6.2 How Changes in Income and Prices Affect Consumption Choices
V
value chain 33.3 Intra-Industry Trade between Similar Economies
variable 7.2 Production in the Short Run, Appendix A The Use of Mathematics in Principles of Economics
Variable costs 7.3 Costs in the Short Run
Variable inputs 7.2 Production in the Short Run
velocity 28.5 Pitfalls for Monetary Policy
Venture capital 17.1 How Businesses Raise Financial Capital
voting cycle 18.3 Flaws in the Democratic System of Government
W
wage 4.1 Demand and Supply at Work in Labor Markets
wage elasticity of labor supply 5.4 Elasticity in Areas Other Than Price
wages 21.4 What Causes Changes in Unemployment over the Long Run, 22.1 Tracking Inflation, 22.4 The Confusion Over Inflation
Wages and salaries 7.3 Costs in the Short Run
Walter McMahon 13.1 Investments in Innovation
warranty 16.1 The Problem of Imperfect Information and Asymmetric Information
Wealth 15.5 Government Policies to Reduce Income Inequality
Workman’s compensation insurance 16.2 Insurance and Imperfect Information
World Trade Organization (WTO) 33.4 The Benefits of Reducing Barriers to International Trade, 34.1 Protectionism: An Indirect Subsidy from Consumers to Producers, 34.3 Arguments in Support of Restricting Imports, 34.4 How Governments Enact Trade Policy: Globally, Regionally, and Nationally
Z
Zero elasticity 5.2 Polar Cases of Elasticity and Constant Elasticity
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