Includes index.

pt. I. Introduction : thinking like an economist -- 1. Economics and economic reasoning -- What economics is -- A guide to economic reasoning -- Economic terminology -- Economic insights -- Economic institutions -- Economic policy options -- 2. Trade, trade-offs, and government policy -- The production possibilities model -- Trade and comparative advantage -- Regulating trade : institutions, government, and trade -- Appendix A. Graphish : the language of graphs -- 3. The evolving U.S. economy in perspective -- The U.S. economy in historical perspective -- The U.S. economy -- The U.S. economy and globalization -- Appendix A. The history of economic systems -- 4. Supply and demand -- Demand -- Supply -- The interaction of supply and demand -- The limitations of supply/demand analysis -- 5. Using supply and demand -- Real-world supply and demand applications -- Government intervention in the market -- Appendix A. Algebraic representation of supply, demand, and equilibrium.

pt. II. Macroeconomics -- section I. Macroeconomic problems -- 6. Economic growth, business cycles, unemployment, and inflation -- Two frameworks : the long run and the short run -- Growth -- Business cycles -- Unemployment -- Inflation -- 7. National income accounting -- Two methods of calculating GDP -- Using GDP figures -- Some limitations of national income accounting.

section II. The macroeconomic framework -- 8. Growth, productivity, and the wealth of nations -- General observations about growth -- The sources of growth -- The production function and theories of growth -- Economic policies to encourage per capita growth -- 9. Aggregate demand, aggregate supply, and modern macroeconomics -- The historical development of modern macro -- The AS/AD model -- The aggregate demand curve -- The short-run aggregate supply curve -- The long-run aggregate supply curve -- Equilibrium in the aggregate economy -- Why macro policy is more complicated than the AS/AD model makes it look -- 10. The multiplier model -- Determining the equilibrium level of aggregate income -- The multiplier model in action -- Fiscal policy in the multiplier model -- Limitations of the multiplier model -- Appendix A. An algebraic presentation of the expanded multiplier model -- Appendix B. The multiplier model and the AS/AD model.

section III. Money, inflation, and monetary policy -- 11. Money, banking, and the financial sector -- Why is the financial sector important to macro? -- The definition and functions of money -- Alternative measures of money -- Banks and the creation of money -- Regulation of banks and the financial sector -- Appendix A. A closer look at financial institutions and financial markets -- Appendix B. Creation of money using T-accounts -- 12. Monetary policy and the debate about macro policy -- Duties and structure of the Fed -- Tools of monetary policy -- Monetary policy in the AS/AD model -- Problems in the conduct of monetary policy -- Appendix A. The effect of monetary policy using T-accounts -- 13. Inflation and its relationship to unemployment and growth -- Some basics about inflation -- Theories of inflation -- Inflation and unemployment : the Phillips curve -- The relationship between inflation and growth.

section IV. Macro policy in perspective -- 14. Aggregate demand policy in perspective -- Supply-side versus demand-side policies -- Problems with fiscal policy -- Building fiscal policies into institutions -- Conventional wisdom about monetary and fiscal policy -- Alternatives and supplements to monetary and fiscal policy -- Credibility in aggregate demand policy -- 15. Politics, deficits, and debt -- Defining deficits and surpluses -- Structural and passive deficits and surpluses -- Nominal and real deficits and surpluses -- The definition of debt and assets -- U.S. government deficits and debt : the historical record -- Social security, Medicare, and lockboxes -- 16. Macro policies in developing countries -- Developing countries in perspective -- Growth versus development -- Monetary policy in developing countries -- Obstacles to economic development -- Mission impossible.

section V. International policy issues -- 17. International trade policy, comparative advantage, and outsourcing -- Patterns of trade -- The principle of comparative advantage -- Comparative advantage in today's economy -- Varieties of trade restrictions -- Reasons for trade restrictions -- Why economics generally oppose trade restrictions -- Institutions supporting free trade -- 18. International financial policy -- The balance of payments -- Exchange rates -- Purchasing power parity on real exchange rates -- Advantages and disadvantages of alternative exchange rate systems -- The Euro : a common currency for Europe -- Appendix A. History of exchange rate systems -- 19. Macro policy in a global setting -- The ambiguous international goals of macroeconomic policy -- Monetary and fiscal policy and the trade deficit -- International phenomena and domestic goals -- Globalization, macro policy, and the U.S. economy -- Glossary -- Colloquial glossary.