Campbell R. McConnell - GBV
Campbell R. McConnellUniversity of NebraskaStanley L BruePacific Lutheran UniversitySean M. FlynnScripps CollegeA.CJMcGraw-HillIrwim
? List of Key GraphsPrefaceReviewersXIHXIVxxivPART ONEto Economics amdTo the StudentChapter 1Limits, ADternatives, and Choices3The Economic Perspective4Scarcity and Choice / Purposeful Behavior / MarginalAnalysis: Comparing Benefits and CostsConsider This: Free for All? 4Consider This: Fast-Food Lines 5Theories, Principles, and ModelsMicroeconomics and Macroeconomics56Microeconomics / Macroeconomics / Positive andNormative EconomicsIndividual's Economizing Problem7Limited Income / Unlimited Wants / A Budget LineConsider This: Did Gates,Winfrey, and Rodriguez Make BadChokes? 9Society's Economizing Problem10Scarce Resources / Resource CategoriesProduction Possibilities Model//Production Possibilities Table / Production PossibilitiesCurve / Law of Increasing OpportunityCosts / Optimal AllocationConsider This: The Economics of War 14Unemployment, Growth, and the Future14A Growing Economy / Present Choices and FuturePossibilities / A Qualification: International TradeLast W o r d : Pitfalls to Sound Economic Reasoning 16Chapter 1 Appendix: Graphs and Their Meaning22Chapter 2The Market System and the Circular Flow29Economic Systems30The Command System / The Market SystemCharacteristics of the Market System30Private Property / Freedom of Enterprise and Choice /Self-Interest / Competition / Markets and Prices /Technology and Capital Goods / Specialization /Use of Money / Active, but Limited, GovernmentFive Fundamental Questions34What Will Be Produced? / How Will the Goods and ServicesBe Produced? / Who Will Get the Output? / How Will theSystem Accommodate Change? / How Will the SystemPromote Progress?Consider This: McHits and McMisses 35The "Invisible Hand"38
ContentsT h e Demise o f t h e C o m m a n d SystemsThe Coordination Problem / The Incentive ProblemConsider This: TheTwo Koreas 3938Chapter 5Market Failures: Public Goods and Externalities 92T h e Circular F l o w ModelHouseholds / Businesses / Product Market /Resource MarketLast Word: Shuffling the Deck 4140M a r k e t Failures in Competitive MarketsDemand-Side Market Failures / Supply-SideMarket Failures93Efficiently Functioning MarketsConsumer Surplus / Producer Surplus / EfficiencyRevisited / Efficiency Losses (or Deadweight Losses)93Public GoodsPrivate Goods Characteristics / Public GoodsCharacteristics / Optimal Quantity of a Public Good /Demand for Public Goods / Comparing MB and MC /Cost-Benefit Analysis / Quasi-Public Goods /The Reallocation ProcessConsider This: Street Entertainers 100Consider This: Art for Art's Sake 10199PART TWOPrice, Quantity, amd EfficiencyChapter 3Demand, Supply, and Market Equilibrium4647Markets48DemandLaw of Demand / The Demand Curve / MarketDemand / Changes in Demand / Changes in QuantityDemanded48Supply53Law of Supply / The Supply Curve / Market Supply /Determinants of Supply / Changes in Supply /ExternalitiesNegative Externalities / Positive Externalities /Government Intervention / Society's Optimal Amount ofExternality ReductionConsider This: The Fable of the Bees 106104Government's Role in the EconomyLast W o r d : Carbon Dioxide Emissions, Cap and Trade, andCarbon Taxes 110109Changes in Quantity SuppliedM a r k e t EquilibriumEquilibrium Price and Quantity / Rationing Function ofPrices / Efficient Allocation / Changes in Supply, Demand,and EquilibriumConsider This: Ticket Scalping: A Burn Rap! 5856PART THREEMicroeconomics of Product MarketsConsider This: Salsa and Coffee Beans 61A p p l i c a t i o n : G o v e r n m e n t - S e t PricesPrice Ceilings on Gasoline / Rent Controls /Price Floors on Wheat61Chapter 6Consumer Behavior11577611769L a w o f Diminishing Marginal U t i l i t yTerminology / Total Utility and Marginal Utility /Marginal Utility and DemandConsider This: Vending Machines and Marginal Utility 11 7118Elasticity75T h e o r y o f Consumer BehaviorConsumer Choice and the Budget Constraint /Utility-Maximizing Rule / Numerical Example /Algebraic GeneralizationPrice Elasticity o f DemandThe Price-Elasticity Coefficient and Formula /Interpretations of Ed I The Total-Revenue Test / PriceElasticity and the Total-Revenue Curve / Determinants ofPrice Elasticity of Demand / Applications of Price Elasticity ofDemandConsider This: A Bit of a Stretch 7876U t i l i t y M a x i m i z a t i o n and t h e Demand C u r v eDeriving the Demand Schedule and Curve / Income andSubstitution Effects122Applications and ExtensionsiPods / The Diamond-Water Paradox / Opportunity Costand the Value of Time / Medical Care Purchases /Cash and Noncash Gifts123Prospect T h e o r yLosses and Shrinking Packages / Framing Effects andAdvertising / Anchoring and Credit Card Bills /Mental Accounting and Overpriced Warranties /The Endowment Effect and Market TransactionsConsider This: Rising Consumption and the HedonicTreadmill 126Last W o r d : Nudging PeopleToward Better Decisions 128125Chapter 6 Appendix: Indifference Curve Analysis133Last W o r d : A Legal Market for Human Organs? 62Chapter 3 Appendix: A d d i t i o n a l Examples o fSupply and DemandChapter 4Price Elasticity o f SupplyPrice Elasticity of Supply: The Market Period / PriceElasticity of Supply: The Short Run / Price Elasticity ofSupply: The Long Run / Applications of Price Elasticity ofSupplyCross Elasticity and Income Elasticity o f DemandCross Elasticity of Demand / Income Elasticity of DemandLast W o r d : Elasticity and Pricing Power: Why DifferentConsumers Pay Different Prices 8687
Contents I)Chapter 7Businesses and the Costs of ProductionTechnological Advance and Competition140189Creative DestructionConsider This: Running a Company Is Hard Business / 90Last W o r d : Efficiency Gains from Entry: The Case of GenericDrugs 191Economic CostsExplicit and Implicit Costs / Accounting Profit and NormalProfit / Economic Profit / Short Run and Long Run141Short-Run Production RelationshipsLaw of Diminishing ReturnsConsider This: Diminishing Returns from Study 144144Short-Run Production CostsFixed, Variable, and Total Costs / Per-Unit, or Average,Costs / Marginal Cost / Shifts of the Cost Curves147A n Introduction to Pure MonopolyExamples of Monopoly / Dual Objectives of theStudy of Monopoly195Long-Run Production CostsFirm Size and Costs / The Long-Run Cost Curve /Economies and Diseconomies of Scale / Minimum EfficientScale and Industry Structure152Barriers to EntryEconomies of Scale / Legal Barriers to Entry: Patents andLicenses / Ownership or Control of Essential Resources /Pricing and Other Strategic Barriers to Entry195Applications and IllustrationsRising Gasoline Prices / Successful Start-Up Firms /TheVerson Stamping Machine / The Daily Newspaper /Aircraft and Concrete PlantsLast Word: Don't Cry over Sunk Costs 158157Monopoly DemandMarginal Revenue Is Less Than Price / The Monopolist Is aPrice Maker / The Monopolist Sets Prices in the ElasticRegion of Demand197Output and Price DeterminationCost Data / MR MC Rule / No Monopoly SupplyCurve / Misconceptions Concerning Monopoly Pricing /Possibility of Losses by Monopolist200Economic Effects of MonopolyPrice, Output, and Efficiency / Income Transfer / CostComplications / Assessment and Policy Options203Price DiscriminationConditions / Examples of Price Discrimination /Graphical AnalysisConsider This: Price Discrimination at the Ballpark 208207Regulated MonopolySocially Optimal Price: P MC / Fair-Return Price: P ATC / Dilemma of Regulation209Chapter 8Pure Competition in the Short RunFour Market Models763164Pure Competition: Characteristics andOccurrence164Demand as Seen by a Purely Competitive SellerPerfectly Elastic Demand / Average,Total, and MarginalRevenue165Profit Maximization in the Short Run: Total-RevenueTotal-Cost Approach166Profit Maximization in the Short Run:Marginal-Revenue-Marginal-Cost ApproachProfit-Maximizing Case / Loss-Minimizing Case /Shutdown CaseConsider This: The StillThere Motel 173167Marginal Cost and Short-Run SupplyGeneralized Depiction / Diminishing Returns, ProductionCosts, and Product Supply / Changes in Supply / Firm andIndustry: Equilibrium PriceLast Word: fixed Costs: Digging Yourself Out of a Hole 177173Chapter 9Pure Competition in the Long RunChapter 10Pure Monopoly194L a s t W o r d : De Beers Diamonds: Are MonopoliesForever? 212Chapter 11181The Long Run in Pure CompetitionProfit Maximization in the Long Run / Goal of OurAnalysis / Long-Run Equilibrium / Long-Run Supply for aConstant-Cost Industry / Long-Run Supply for an IncreasingCost Industry / Long-Run Supply for a Decreasing-CostIndustry182Pure Competition and EfficiencyProductive Efficiency:? Minimum ATC / AllocativeEfficiency:? MC / Maximum Consumer and ProducerSurplus / Dynamic Adjustments / "Invisible Hand" Revisited186Monopolistic Competition and Oligopoly276Monopolistic CompetitionRelatively Large Number of Sellers / DifferentiatedProducts / Easy Entry and Exit / Advertising /Monopolistically Competitive Industries216Price and O u t p u t in Monopolistic CompetitionThe Firm's Demand Curve / The Short Run:Profit or Loss / The Long Run: Only a Normal Profit219Monopolistic Competition and EfficiencyNeither Productive nor Allocative Efficiency / ExcessCapacity221Product VarietyBenefits of Product Variety / Further Complexity222OligopolyA Few Large Producers /Products / Control overEntry Barriers / MergersConsider This: Creative223Homogeneous or DifferentiatedPrice, but Mutual Interdependence // Oligopolistic IndustriesStrategic Behavior 224
xxx ContentsOligopoly Behavior: A Game Theory Overview226Mutual Interdependence Revisited / Collusion /Incentive to CheatConsider This: The Prisoner's Dilemma 227Three Oligopoly ModelsDeterminants of Resource Demand228Kinked-Demand Theory: Noncollusive Oligopoly / Cartelsand Other Collusion / Price Leadership ModelOligopoly and Advertising234Positive Effects of Advertising / Potential NegativeEffects of Advertising Oligopoly and Efficiency235Productive and Allocative Efficiency / QualificationsLast W o r d : Oligopoly in the Beer Industry 236Chapter 11 Appendix: AdditionalGame Theory ApplicationsResource Demand under Imperfect Product MarketCompetition / Market Demand for a ResourceConsider This: Superstars 253253Changes in Product Demand / Changes in Productivity /Changes in the Prices of Other Resources / OccupationalEmployment TrendsElasticity of Resource DemandOptimal Combination of Resources256258The Least-Cost Rule / The Profit-Maximizing Rule /Numerical IllustrationMarginal Productivity Theory of IncomeDistribution260Last W o r d : Input Substitution: The Case of ATMs 261241Chapter 13WEB Chapter 11www.mcconnelH 9e.comTechnology, R&D, and EfficiencyInvention, Innovation, and Diffusion2461IW-2Invention / Innovation / Diffusion / R&DExpenditures / Modern View of Technological AdvanceRole of Entrepreneurs and Other InnovatorsIIW-4IIW-8IIW-10IIW-13271Three Union Models273Demand-Enhancement Model / Exclusive or Craft UnionModel / Inclusive or Industrial Union Model / WageIncreases and Job Loss275Indeterminate Outcome of Bilateral Monopoly /Desirability of Bilateral Monopoly276Case against the Minimum Wage / Case for the MinimumWage / Evidence and ConclusionsIIW-15Productive Efficiency / Allocative Efficiency / CreativeDestructionLast W o r d : On the Path to the PersonalComputer and Internet IIW-16Wage Differentials277Marginal Revenue Productivity / Noncompeting Groups /Compensating Differences / Market ImperfectionsConsider This: My Entire Life 280Pay for Performance281The Principal-Agent Problem Revisited / Addenda: NegativeSide Effects of Pay for PerformanceLast W o r d : Are Chief Executive Officers (CEOs) Overpaid? 283PART FOURMicroeconomics of Resource Markets269Upsloping Labor Supply to Firm / MRC Higher Than theWage Rate / Equilibrium Wage and Employment /Examples of Monopsony PowerThe Minimum-Wage ControversyMarket Structure and Technological Advance / Inverted-UTheory of R&D / Market Structure and TechnologicalAdvance: The EvidenceTechnological Advance and EfficiencyA Purely Competitive Labor MarketBilateral Monopoly ModelBenefits of Being FirstConsider This: Trade Secrets / IW-12Role of Market Structure267267Monopsony ModelIIW-5Increased Revenue via Product Innovation / Reduced Costvia Process InnovationImitation and R&-D IncentivesLabor, Wages, and EarningsGeneral Level of WagesMarket Demand for Labor / Market Supply of Labor /Labor Market EquilibriumInterest-Rate Cost of Funds / Expected Rateof Return / Optimal R&D ExpendituresIncreased Profit via Innovation266Role of Productivity / Real Wages and Productivity /Long-Run Trend of Real WagesForming Start-Ups / Innovating within Existing Firms /Anticipating the Future / Exploiting University andGovernment Scientific ResearchA Firm's Optimal Amount of R&-DWage Determination247Chapter 13 Appendix: Labor Unions and TheirImpacts287Chapter 12The Demand for Resources248Chapter 14Significance of Resource PricingMarginal Productivity Theory of Resource Demand249249Rent, Interest, and Profit293Economic Rent294Resource Demand as a Derived Demand / Marginal RevenueProduct / Rule for Employing Resources: MRP MRC / MRP as Resource Demand Schedule /Perfectly Inelastic Supply / Equilibrium Rent and Changes inDemand / Productivity Differences and RentDifferences / Land Rent:A Surplus Payment / Land
Contents xxxiOwnership: Fairness versus Allocative Efficiency /Application: A Single Tax on LandInterest297Money Is Not a Resource / Interest Rates and InterestIncome / Range of Interest Rates / Pure Rate of Interest /Loanable Funds Theory of Interest Rates / Extending theModel / Time-Value of Money / Role of InterestRates / Application: Usury LawsConsider This: That Is Interest 301Entrepreneurship and Profit / Insurable and UninsurableRisks / Sources of Uninsurable Risks / Profit asCompensation for Bearing Uninsurable Risks / Sources ofEconomic Profit / Profit Rations Entrepreneurship /Entrepreneurs, Profits, and Corporate StockholdersConsider This: Apple CEO Steve Jobs 305Last Word: Determining the Price of Credit 306Income Shares308Chapter 15Natural Resource and Energy Economics312313Resource Supplies: Doom or Boom?Population Growth / Resource Consumption per Person314Energy Economics317Efficient Energy Use / Running Out of Energy!Consider This: Developing/Uternative Fuel Sources Is Both Riskyand Costly 320Nonrenewable Resources321321322Present Use versus Future Use / Incomplete Property RightsLead to Excessive Present Use / Application: ConflictDiamondsRenewable ResourcesBenefits Received versus Ability to Pay /Progressive, Proportional, and Regressive TaxesConsider This: The VAT: A Very Alluring Tax? 346347Elasticity and Tax Incidence /Efficiency Loss of a Tax304Natural Resource EconomicsUsing Present Values to Evaluate Future Possibilities342344Tax Incidence and Efficiency LossEconomic ProfitConsider T h i s : Can Governments Raise Birthrates?Local, State, and Federal EmploymentApportioning the Tax Burden325Elephant Preservation / Forest Management / OptimalForest Harvesting / Optimal Fisheries Management / Policiesto Limit Catch SizesLast Word: Is Economic Growth Bad for the Environment? 330Probable Incidence of U.S. Taxes350Personal IncomeTax / PayrollTaxes /Corporate IncomeTax / Sales and Excise Taxes /Property TaxesLast W o r d : Taxation and Spending: Redistribution versusRecycling 350The U.S. Tax Structure353Chapter 17Asymmetric Information, Voting, andPublic Choice357Information Failures358Inadequate Buyer Information about Sellers /Inadequate Seller Information about Buyers /QualificationConsider This: "Lemons" 360Public Choice TheoryRevealing Preferences throughMajority Voting361362Inefficient Voting Outcomes / Paradox ofVoting /Median-Voter ModelGovernment Failure365Representative Democracy and the Principal-AgentProblem / Clear Benefits, Hidden Costs /Limited and Bundled Choice / Bureaucracy andInefficiency / Corruption / Imperfect InstitutionsConsiderThis: Mohair and the Collective Action Problem 366Last W o r d : "Government Failure" in the News 370PART SIXMocroecoDDomic Issues amd Policies373PART FIVEMicroeconomics o f G o v e r n m e n t335Chapter 16Public Finance: Expendituresand Taxes336Government and the Circular FlowGovernment Finance337338Government Purchases and Transfers /Government RevenuesFederal Finance339State Finances / Local FinancesConsider This: State Lotteries: A Good Bet? 342374The Antitrust Laws375Historical Background / Sherman Act of 1890 /Clayton Act of 1914 / Federal Trade CommissionAct of 1914 / Celler-KefauverActof 1950Antitrust Policy: Issues and Impacts341376Issues of Interpretation / Issues of Enforcement /Effectiveness of Antitrust LawsConsiderThis: Of Catfish and Art (and OtherThings inCommon) 381Industrial RegulationFederal Expenditures / Federal Tax RevenuesState and Local FinanceChapter 18Antitrust Policy and Regulation38INatural Monopoly / Problems with IndustrialRegulation / Legal Cartel TheoryDeregulation383
ContentsSocial Regulation384Distinguishing Features / The Optimal Level of SocialRegulation / Two RemindersLast W o r d : United States v. Microsoft 386Chapter 19Agriculture: Economics and PolicyEconomics of Agriculturef.391392The Short Run: Price and Income Instability / The Long Run:A Declining Industry / Farm-Household IncomeConsiderThis: Risky Business 396Economics of Farm Policy398402405Facts about Income Inequality470411Distribution by Income Category / Distribution by Quintiles(Fifths) / The Lorenz Curve and Gini Ratio / Income Mobility:The Time Dimension / Effect of Government RedistributionCauses of Income Inequality414415Rising Income Inequality since 1970 / Causes of GrowingInequalityConsiderThis: Laughing at Shrek 417Equality versus EfficiencyHealth Care Spending / Quality of Care: Are We Healthier? /Economic Implications of Rising costs / Too Much Spending?438439Peculiarities of the Health Care Market / The IncreasingDemand for Health Care / Role of Health Insurance /Supply Factors in Rising Health Care Prices /Relative ImportanceConsiderThis: Cancer Fight Goes Nuclear 445Cost Containment: Altering IncentivesThe Patient Protection and Affordable Care Act445447Chapter 22Immigration454Number of Immigrants455Legal Immigrants / Illegal ImmigrantsThe Decision to MigrateAbility / Education and Training / Discrimination /Preferences and Risks / Unequal Distribution of Wealth /Market Power / Luck, Connections, and MisfortuneIncome Inequality over Time434434434435Major Provisions / Objections and AlternativesLast W o r d : Singapore's Efficient and Effective Health CareSystem 448Freedom to Farm Act of 1996 / The Food, Conservation, andEnergy Act of 2008Chapter 20Income Inequality, Poverty,and Discrimination433Deductibles and Copayments / Health Savings Accounts /Managed Care / Medicare and DRG / Limits on MalpracticeAwardsCriticisms of the Parity Concept / Criticisms of thePrice-Support System / The Politics of Farm PolicyLast W o r d : The Sugar Program: A Sweet Deal 404Recent Farm PoliciesThe Health Care IndustryThe U.S. Emphasis on Private Health InsuranceTwin Problems: Costs and AccessHigh and Rising: Health Care Costs.Limited AccessWhy the Rapid Rise in Costs?Rationale for Farm Subsidies / Background:The ParityConcept / Economics of Price Supports / Reduction ofSurplusesConsiderThis: Putting Corn inYour GasTank 401Criticisms and PoliticsChapter 21Health CareEconomic Effects of Immigration417458Personal Gains / Impacts on Wage Rates, Efficiency, andOutput / Income Shares / Complications andModifications / Fiscal Impacts / Research FindingsConsiderThis: Stars and Stripes 459The Illegal Immigration DebateThe Case for Equality: Maximizing Total Utility /The Case for Inequality: Incentives and Efficiency /The Equality-Efficiency Trade-off456Earnings Opportunities / Moving Costs / Factors AffectingCosts and Benefits463Employment Effects / Wage Effects / Price Effects / FiscalImpacts on Local and State Governments / Other ConcernsLast W o r d : Immigration Reform: The Beaten Path to the CurrentStalemate 466Optimal Immigration467C o n s i d e r T h i s : Slicing the Pizza 419The Economics of Poverty419Definition of Poverty / Incidence of Poverty /Poverty Trends / Measurement IssuesThe U.S. Income-Maintenance System421Social Insurance Programs / Public Assistance ProgramsDiscriminationEconomic Analysis of DiscriminationTaste-for-Discrimination Model / StatisticalDiscrimination / Occupational Segregation: The CrowdingModel / Cost to Society as Well as to IndividualsLast W o r d : U.S. Family Wealth and Its Distribution 428424424PART SEVENGDP, Growth, and Instability471Chapter 23An Introduction to Macroeconomics472Performance and PolicyThe Miracle of Modern Economic Growth473474Saving, Investment, and Choosing between Present and FutureConsumption / Banks and Other Financial InstitutionsConsiderThis: Economic versus Financial Investment 476
Contents xxxiiiUncertainty, Expectations, and Shocks476Demand Shocks and Flexible Prices / Demand Shocks andSticky PricesConsiderThis: The Great Recession 479How Sticky Are Prices?480Chapter 24Measuring Domestic Output andNational IncomeAssessing the Economy's PerformanceGross Domestic Product482485486486494497499Nonmarket Activities / Leisure / Improved ProductQuality / The Underground Economy / GDP and theEnvironment / Composition and Distribution of Output /Noneconomic Sources of Well-BeingLast Word: Magical Mystery Tour 501505Economic Growth506Growth as a Goal / Arithmetic of Growth / Growth in theUnited States508The Uneven Distribution of Growth / Catching Up Is PossibleConsiderThis: Economic Growth Rates Matter! 510511512Determinants of Growth512Supply Factors / Demand Factor / Efficiency FactorProduction Possibilities AnalysisGrowth and Production Possibilities /Labor and ProductivityRedistribution Effects of InflationDoes Inflation Affect Output?538513541Cost-Push Inflation and Real Output / Demand-Pull Inflationand Real Output / HyperinflationLast W o r d : The Stock Market and the Economy 542PART EIGHTMacroeconomic Models andFiscal PolicyChapter 25Economic GrowthC o n s i d e r T h i s : Patents and Innovation535Who Is Hurt by Inflation? / W h o Is Unaffected or Helped byInflation? / Anticipated Inflation / Other Redistribution IssuesAdjustment Process in a One-Product Economy / AnAlternative Method / Real-World Considerations and DataInstitutional Structures That Promote GrowthInflationMeaning of Inflation / Measurement of Inflation / Facts ofInflation / Types of Inflation / Complexities / Core InflationConsiderThis: Clipping Coins 537Net Domestic Product / National Income / PersonalIncome / Disposable Income / The Circular Flow RevisitedModern Economic Growth529Measurement of Unemployment / Types of Unemployment /Definition of Full Employment / Economic Cost ofUnemployment / NoneconomicCosts / International Comparisons492Shortcomings of GDP527Phases of the Business Cycle / Causation: A First Glance /Cyclical Impact: Durables and NondurablesUnemploymentCompensation of Employees / Rents / Interest /Proprietors' Income / Corporate Profits / Taxes onProduction and Imports / From National Income to GDPNominal GDP versus Real GDPChapter 26Business Cycles, Unemployment, and Inflation 526The Business Cycle488Other National Accounts521The Antigrowth View / In Defense of Economic GrowthLast W o r d : Economic Growth in China 522Personal Consumption Expenditures (C) / Gross PrivateDomestic Investment (lg) I Government Purchases (G) /Net Exports (Xn) / Putting It All Together: GDP C /e G X nConsiderThis: Stocks versus Flows 491The Income Approach518Reasons for the Rise in the Average Rate of ProductivityGrowth / Implications for Economic Growth /Skepticism about Longevity / What Can We Conclude?Is Growth Desirable and Sustainable?A Monetary Measure / Avoiding Multiple Counting /GDP Excludes Nonproduction Transactions / Two Ways ofLooking at GDP: Spending and IncomeThe Expenditures Approach514Labor Inputs versus Labor Productivity / TechnologicalAdvance / Quantity of Capital / Education andTraining / Economies of Scale and Resource AllocationConsiderThis: Women, the Labor Force, and Economic Growth 5 / 6The Rise in the Average Rate of Productivity GrowthLast Word: Inventory Management and the Business Cycle 480Categorizing Macroeconomic Models UsingPrice StickinessAccounting for GrowthChapter 27Basic Macroeconomic RelationshipsThe Income-Consumption andIncome-Saving Relationships546547548The Consumption Schedule / The Saving Schedule /Average and Marginal Propensities / NonincomeDeterminants of Consumption and Saving /Other Important ConsiderationsConsiderThis: The Great Recession and the Paradox of Thrift 554The Interest-Rate-InvestmentRelationship555Expected Rate of Return / The Real Interest Rate /Investment Demand Curve / Shifts of the InvestmentDemand Curve / Instability of InvestmentConsiderThis: The Great Recession and the Investment Riddle 560
xxxiv ContentsThe Multiplier Effect560Rationale / The Multiplier and the Marginal Propensities /How Large Is the Actual Multiplier Effect?Last W o r d : Squaring the Economic Circle 563Chapter 28The Aggregate ExpendituresModelAssumptions and Simplifications Consumption and Investment SchedulesEquilibrium GDP: C lg GDP567568568569572581627628Income Distribution / Incentives / Foreign-Owned PublicDebt / Crowding-Out Effect RevisitedLast W o r d : The Social Security and MedicareShortfalls 630Money, Banking, and MonetaryPolicy590Aggregate Demand Curve591Chapter 31Money, Banking, and FinancialInstitutionsThe Functions of MoneyThe Components of the Money SupplyConsumer Spending / Investment Spending / GovernmentSpending / Net Export Spending594635636637637Money Definition MI / Money Definition M2ConsiderThis: Are Credit Cards Money? 640What "Backs" the Money Supply?Aggregate Supply in the Immediate Short Run / AggregateSupply in the Short Run / Aggregate Supply in the LongRun / Focusing on the Short RunMoney as Debt / Value of Money / Money andPrices / Stabilizing Money's Purchasing Power597Input Prices / Productivity / Legal-InstitutionalEnvironment600Increases in AD: Demand-Pull Inflation / Decreases in AD:Recession and Cyclical Unemployment / Decreases in AS:Cost-Push Inflation / Increases in AS: Full Employment withPrice-Level StabilityConsiderThis: Ratchet Effect 603Last W o r d : Has the Impact of Oil Prices Diminished? 605Chapter 29 Appendix: The Relationship of theAggregate Demand Curve to the AggregateExpenditures Model625Ownership / Debt and GDP / InternationalComparisons / Interest ChargesPART NINEAggregate DemandEquilibrium and Changes in Equilibrium623Problems of Timing / Political Considerations /Future Policy Reversals / Offsetting State and LocalFinance / Crowding-Out Effect / Current Thinkingon Fiscal PolicySubstantive Issues578589Changes in Aggregate SupplyProblems, Criticisms, and ComplicationsBankruptcy / Burdening Future GenerationsChapter 29Aggregate Demand andAggregate SupplyAggregate Supply619Cyclically Adjusted Budget / Recent U.S. Fiscal Policy /Budget Deficits and ProjectionsFalse ConcernsRecessionary Expenditure Gap / Inflationary ExpenditureGap / Application: The Recession of 2007-2009Last W o r d : Say's Law, the Great Depression, and Keynes 584Changes in Aggregate DemandEvaluating Fiscal PolicyThe U.S. Public Debt573574Government Purchases and Equilibrium GDP / Taxation andEquilibrium GDPEquilibrium versus Full-Employment GDP617Automatic or Built-in StabilizersNet Exports and Aggregate Expenditures / The Net ExportSchedule / Net Exports and Equilibrium GDP / InternationalEconomic LinkagesAdding the Public Sector614Built-in StabilitySaving Equals Planned Investment / No Unplanned Changesin InventoriesChanges in Equilibrium GDP and the MultiplierAdding International Trade673Fiscal Policy and the AD-AS ModelExpansionary Fiscal Policy / ContractionaryFiscal Policy / Policy Options: G or T?Tabular Analysis / Graphical AnalysisOther Features of Equilibrium GDPChapter 30Fiscal Policy, Deficits, and DebtThe Federal Reserve and the Banking System643Historical Background / Board of Governors /The 12 Federal Reserve Banks / FOMC / Commercial Banksand Thrifts / Fed Functions and the Money Supply /Federal Reserve IndependenceThe Financial Crisis of 2007 and 2008646The Mortgage Default Crisis / Securitization /Failures and Near-Failures of Financial Firms /The Treasury Bailout: TARP / The Fed's Lender-of-LastResort ActivitiesThe Postcrisis U.S. Financial ServicesIndustry610Last W o r d : Electronic Banking 651649
Contents xxxvArbitrageChapter 32Money CreationThe Fractional Reserve System655656Illustrating the Idea: The Goldsmiths / SignificantCharacteristics of Fractional Reserve BankingA Single Commercial Bank660The Banking System: Multiple-Deposit Expansion708Security Market Line: ApplicationsConsiderThis: Ponzi Schemes 7/0Last W o r d : Index Funds versus Actively Managed Funds 712PART TENExtensions and issyesTransaction 6: Granting a Loan / Transaction 7: BuyingGovernment Securities / Profits, Liquidity, and the FederalFunds Market704Diversification / Comparing Risky Investments /Relationship of Risk and Average Expected Rates of Return /The Risk-Free Rate of ReturnThe Security Market Line657Transaction I: Creating a Bank / Transaction 2:AcquiringProperty and Equipment / Transaction 3:Accepting Deposits /Transaction 4: Depositing Reserves in a Federal ReserveBank / Transaction 5: Clearing a Check Drawn against the BankMoney-Creating Transactions of a Commercial BankRisk703776Chapter 35663The Banking System's Lending Potential / The MonetaryMultiplier / Reversibility: The Multiple Destruction of MoneyLast Word: The Bank Panics of 1930-1933 666Extending the Analysis ofAggregate Supply717From Short Run to Long Run718Short-Run Aggregate Supply / Long-Run AggregateSupply / Long-Run Equilibrium in the AD-AS ModelChapter 33Applying the Extended AD-AS ModelInterest Rates and Monetary Policy670Interest Rates671The Demand for Money / T
Society's Economizing Problem 10 Scarce Resources / Resource Categories Production Possibilities Model // Production Possibilities Table / Production Possibilities Curve / Law of Increasing Opportunity Costs /
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GBV. Increase public awareness of GBV by moving away from the mere 16 days of activism to a robust 365 days campaign against GBV and encourage every citizen to take specific steps to prevent GBV in both the private and public arena. In light of the recommendations made the Government UN GBV JP facilitated a one day workshop
managing a GBV program with an NGO or coordinating a GBV working group. GBV coordinators can and are recruited without GBV program management experience and sometimes move from coordination into program management positions. Many GBV Program Managers do not move
The Gender Based Violence (GBV) conference will bring together partners working in the GBV Sector; Government Department stakeholders; representatives from donors in the Development Sector, SANAC and the Global Fund. The conference will focus on: The State's Response in dealing with GBV Exploring the link between GBV & HIV
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gender-based violence (GBV) across all sectors of humanitarian response. . promotes resilience and supports lasting solutions to the problem of GBV. Two overarching strategic priorities – inclusivity and adopting a supportive communications . Humanitarian actors are aware of and support the GBV Guidelines, and management and leadership .
What is a Gender-based Violence Specialist? . Able to conduct strategic planning for GBV prevention and response (B) . can and are recruited without GBV program management experience and sometimes move from coordination into program management positions. Many GBV Program Managers do not move into
availability of gender based violence (GBV) prevention and response services and deterred . The Provincial Programme Analyst, GBV will contribute to the effective management of UNFPA supported GBV activities, ensuring multi-sectoral approach to prevention, mitigation . Strategic Engagement and Technical Coordination
