Principles of Macroeconomics
Textbook: Macroeconomics (Brief Edition), by McConnell, Brue, and Flynn, McGraw-Hill Irwin, 2013. ISBN: 978-0-07-723097-5
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McGraw-Hill Connect
Using the Online Learning Center (.pdf)
Use the OLC for access to PPT slides, videos, quizzes, study guides, and other
important chapter-by-chapter information.
McGraw-Hill Connect
CHAPTER MATERIAL
Chapter 1: Limits, Alternatives, and Choices
After reading this chapter, you should be able to:
- Define economics and the features of the economic perspective.
- Describe the role of economic theory in economics.
- Distinguish microeconomics from macroeconomics.
- List the categories of scarce resources and delineate the nature of the economizing problem.
- Apply production possibilities analysis, increasing opportunity costs, and economic growth.
- (Appendix) Understand graphs, curves, and slopes as they relate to economics.
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Chapter 1: PPC
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Chapter 1: Budget Line
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Chapter 2: The Market System and the Circular Flow
After reading this chapter, you should be able to:
- Differentiate between a command system and a market system.
- List the main characteristics of the market system.
- Explain how the market system answers the four fundamental questions.
- Discuss how the market system adjusts to change and promotes progress.
- Describe the mechanics of the circular flow model.
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Chapter 3: Demand, Supply, and Market Equilibrium
After reading this chapter, you should be able to:
- Describe demand and explain how it can change.
- Describe supply and explain how it can change.
- Relate how supply and demand interact to determine market equilibrium.
- Explain how changes in supply and demand affect equilibrium prices and quantities.
- Identify what government-set prices are and how they can cause product surpluses and shortages.
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Video Links:
Chapter 3: The Demand Curve (23 Mb download) Chapter 3: The Supply Curve (21 Mb download) Chapter 3: Equilibrium (40 Mb download) Chapter 3: Curves Shifting (47 Mb download) | ||||
Chapter 4: Market Failures: Public Goods and Externalities
After reading this chapter, you should be able to:
- Differentiate between demand-side market failures and supply-side market failures.
- Explain consumer surplus and producer surplus, and discuss how properly functioning markets maximize their sum while optimally allocating resources.
- Identify how public goods are distinguished from private goods, and explain the method for determining the optimal quantity of a public good.
- Explain how positive and negative externalities cause under-and overallocations of resources, and how they might be corrected.
- Show why we normally won't want to pay what it would cost to eliminate every last bit of a negative externality.
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Chapter 5: GDP and Economic Growth
After reading this chapter, you should be able to:
- Explain how gross domestic product (GDP) is defined and measured.
- Describe how economists distinguish between nominal GDP and real GDP.
- List two ways that economic growth is measured.
- Identify the general supply, demand, and efficiency forces that give rise to economic growth.
- Describe "growth accounting" and the specific factors accounting for economic growth in the United States.
- Explain why the trend rate of U.S. productivity growth has increased since the earlier 1973–1995 period.
- Discuss differing perspectives as to whether growth is desirable and sustainable.
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Chapter 6: Business Cycles, Unemployment, and Inflation
After reading this chapter, you should be able to:
- Describe the business cycle and its primary phases.
- Illustrate how unemployment and inflation are measured.
- Explain the types of unemployment and inflation and their various economic impacts.
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Data Links
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Chapter 6: Unemployment
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Chapter 6: Inflation
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Video Links
Chapter 6: The Business Cycle (51 Mb download)
NBC Higher Ed Video Links: Peanut Butter Prices (Inflation) |
Chapter 7: Aggregate Demand and Aggregate Supply
After reading this chapter, you should be able to:
- Define aggregate demand (AD) and explain the factors that cause it to change.
- Define aggregate supply (AS) and explain the factors that cause it to change.
- Discuss how AD and AS determine an economy's equilibrium price level and level of real GDP.
- Describe how the AD-AS model explains periods of demand-pull inflation, cost-push inflation, and recession.
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Chapter 8: Fiscal Policy, Deficits, and Debt
After reading this chapter, you should be able to:
- Identify and explain the purposes, tools, and limitations of fiscal policy.
- Explain the role of built-in stabilizers in dampening business cycles.
- Describe how the cyclically adjusted budget reveals the status of U.S. fiscal policy.
- Discuss the size, composition, and consequences of the U.S. public debt.
- Explain why there is a long-run fiscal imbalance in the Social Security system.
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Chapter 9: Money, Banking, and Financial Institutions
After reading this chapter, you should be able to:
- Identify and explain the functions of money and the components of the U.S. money supply.
- Describe what "backs" the money supply, making us willing to accept it as payment.
- Discuss the makeup of the Federal Reserve and the U.S. banking system.
- Identify the functions and responsibilities of the Federal Reserve.
- Identify and explain the main factors that contributed to the financial crisis of 2007–2008.
- Discuss the actions of the U.S. Treasury that helped keep the banking and financial crisis of 2007–2008 from worsening.
- Identify the main subsets of the financial services industry in the United States and provide examples of some firms in each category.
- Describe how banks create money in a "fractional reserve" banking system.
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Video: Monetary Policy (Solman video)
Video: Steering the Course (The Fed) (Solman video) Video: In Plain English | ||||||||
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Chapter 10: Interest Rates and Monetary Policy
After reading this chapter, you should be able to:
- Discuss how the equilibrium interest rate is determined in the market for money.
- List and explain the goals and tools of monetary policy.
- Describe the mechanisms by which monetary policy affects GDP and the price level.
- Discuss the effectiveness of monetary policy and its shortcomings.
- Describe how the Fed has used monetary policy in recent years to promote macroeconomic stability.
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Important Links:
Bankrate | ||||