CONTENTS

INTRODUCTION

WHAT IS ECONOMICS?

TRADE-OFFS AND OPPORTUNITY COST

THE EMERGENCE OF FREE TRADE AND THE IMPORTANCE OF COMPARATIVE ADVANTAGE

INTERNATIONAL TRADE AND TRADE BARRIERS

TRADITIONAL ECONOMIES, COMMAND ECONOMIES, AND MARKET ECONOMIES

CAPITALISM VERSUS SOCIALISM

BARTER AND THE DEVELOPMENT OF MONEY

INCONVERTIBLE FIAT EXPLORED

THE TIME VALUE OF MONEY AND INTEREST RATES

THE ORIGIN OF BANKING

HOW BANKS CREATE MONEY

BANKS AS A SYSTEM: REGULATION AND DEREGULATION

SUPPLY AND DEMAND: MARKETS

SUPPLY AND DEMAND: CONSUMER BEHAVIOR

SUPPLY AND DEMAND: A PRICE IS BORN

CHANGES IN SUPPLY AND DEMAND

ACCOUNTING VERSUS ECONOMICS

THE PRODUCTION FUNCTION

CONTROLLING COSTS

PERFECT COMPETITION IN THE SHORT RUN

PERFECT COMPETITION IN THE LONG RUN

OLIGOPOLIES AND IMPERFECTLY COMPETITIVE MARKETS

COLLUSION AND CARTELS

GAME THEORY

PRICING BEHAVIORS

MONOPOLY: THE GOOD, THE BAD, AND THE UGLY

GOVERNMENT IN THE MARKETPLACE: PRICE CEILINGS AND PRICE FLOORS

GOVERNMENT IN THE MARKETPLACE: TAXES AND SUBSIDIES

MARKET FAILURES

FINANCIAL MARKETS AND LOANABLE FUNDS THEORY

THE MONEY MARKET

THE BOND MARKET

THE STOCK MARKET

FOREIGN EXCHANGE AND EXCHANGE RATES

EXPORTS AND THE BALANCE OF TRADE

OFFICIAL RESERVES AND EXCHANGE RATE POLICY

THE PRIVATE SECTOR AND THE PUBLIC SECTOR

THE FOREIGN SECTOR

THE FINANCIAL SECTOR AND FINANCIAL MARKETS

THE GROSS DOMESTIC PRODUCT

GDP: PRIVATE SPENDING AND INVESTMENT

GDP: GOVERNMENT SPENDING AND EXPORTS

APPROACHES TO GDP

REAL GDP CHANGES AND THE BUSINESS CYCLE

WHAT GDP DOESN’T TELL US

UNEMPLOYMENT DEFINED

UNEMPLOYMENT CLASSIFIED

WHY UNEMPLOYMENT IS BAD

INFLATION DEFINED

TYPES OF INFLATION

INFLATION: WINNERS AND LOSERS

DISINFLATION AND DEFLATION

AGGREGATE DEMAND AND AGGREGATE SUPPLY

MACROECONOMIC EQUILIBRIUM

THE KEYNESIAN VIEW AND FISCAL POLICY

THE FEDERAL RESERVE SYSTEM

MONETARY POLICY

SUPPLY-SIDE ECONOMICS

ECONOMIC GROWTH

CONDITIONS FOR ECONOMIC GROWTH

HOW ECONOMIC POLICY AFFECTS GROWTH

THE GREAT DEPRESSION MEETS THE GREAT RECESSION

THE COLLAPSE OF INVESTMENT BANKING

FISCAL POLICY UNDER FIRE

THE ENVIRONMENT AND THE ECONOMY