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Contents - Lessons & Practice

Business · Social Sciences

Principles of Macroeconomics 3e

OpenStax book

OpenStax

Principles of Macroeconomics 3e

21 lessons

One lesson for each chapter of Principles of Macroeconomics 3e, in the book’s order. The lesson teaches what that chapter says you need to know, then checks it.

  1. 1Welcome to Economics!Microeconomics and macroeconomics are two different perspectives on the economy.
  2. 2Choice in a World of ScarcityThe budget constraint, which is the frontier of the opportunity set, illustrates the range of available choices.
  3. 3Demand and SupplyThe equilibrium price and equilibrium quantity occur where the supply and demand curves cross.
  4. 4Labor and Financial MarketsIn the demand and supply analysis of financial markets, the “price” is the rate of return or the interest rate received.
  5. 5ElasticityAn inelastic demand or supply curve is one where a given percentage change in price will cause a smaller percentage change in quantity demanded or supplied.
  6. 6The Macroeconomic PerspectiveTo avoid double counting, GDP counts only final output of goods and services, not the production of intermediate goods or the value of labor in the chain of production
  7. 7Economic GrowthThe Industrial Revolution facilitated the extensive process of economic growth, that economists often refer to as modern economic growth.
  8. 8UnemploymentA person without a job must be willing and able to work and actively looking for work to be counted as unemployed; otherwise, a person without a job is counted as out of the labor force.
  9. 9InflationEconomists often express the price level in terms of index numbers, which transform the cost of buying the basket of goods and services into a series of numbers in the same proportion to each other, but with an…
  10. 10The International Trade and Capital FlowsThe current account balance includes the trade in goods, services, and money flowing into and out of a country from investments and unilateral transfers
  11. 11The Aggregate Demand/Aggregate Supply ModelNeoclassical economists emphasize Say’s law, which holds that supply creates its own demand.
  12. 12The Keynesian PerspectiveThe latter is an example of a macroeconomic externality.
  13. 13The Neoclassical PerspectiveThe neoclassical perspective argues that, in the long run, the economy will adjust back to its potential GDP level of output through flexible price levels.
  14. 14Money and BankingM2 includes all of M1, plus savings deposits, time deposits like certificates of deposit, and money market funds
  15. 15Monetary Policy and Bank RegulationA bank run occurs when there are rumors (possibly true, possibly false) that a bank is at financial risk of having negative net worth.
  16. 16Exchange Rates and International Capital FlowsIn the foreign exchange market, people and firms exchange one currency to purchase another currency.
  17. 17Government Budgets and Fiscal PolicyWhen a government spends more than it collects in taxes, it is said to have a budget deficit.
  18. 18The Impacts of Government BorrowingThe theory of Ricardian equivalence holds that changes in private saving will offset changes in government borrowing or saving.
  19. 19Macroeconomic Policy Around the WorldMacroeconomic policy goals for most countries strive toward low levels of unemployment and inflation, as well as stable trade balances.
  20. 20International TradeA country has an absolute advantage in those products in which it has a productivity edge over other countries; it can produce more of a product.
  21. 21Globalization and ProtectionismThere are three tools for restricting the flow of trade: tariffs, import quotas, and nontariff barriers.