CPS1 Study Economics Book

Unit I FOUNDATIONS
Chapter 1 Economic Methods
An Apple a Day
What Is Economics?
Scarcity
The Scientific Method
Economic Reasoning
Who Needs Rain Forests?
What Are the Tools of Economics?
Factual Tools
Theoretical Tools
Something in the Air
What Are the Uses of Graphs?
Descriptive Charts
Analytical Diagrams
CC: The Energy Gluttons
Putting It Together
Perspective: The Master Tool Builder
For Further Study and Analysis
Appendix: Constructing and Reading Diagrams
Chapter 2 Economic Choices
Steeling Away
What Are the Consequences of Economic Choices?
Trade-Offs
Opportunity Costs
Production Possibilities Frontier
Increasing Costs
Tough Choices
What Are the Basic Economic Questions?
What to Produce?
How to Produce?
For Whom to Produce?
To Nuclear or Not to Nuclear?
What Are Society's Economic Goals?
Growth
Efficiency
Price Stability
Socioeconomic Goals
The Computer Craze
Putting It Together
Perspective: The Affluent Society
For Further Study and Analysis
Chapter 3 The Economic System
That Old-Time Rock and Roll
Why Are Economic Systems Needed?
Specialization
Absolute and Comparative Advantage
Interdependence
The Efficiencyburger
What Are the Principal Types of Economic Systems?
Market Economies
Centrally Directed Economies
Traditional Economies
Mixed Economies
CC: Islamic Economics
How Does a Market System Resolve the Three Basic Economic Questions?
Markets
Incentives
Product and Factor Markets
Circular Flow of the Economy
Market System Resolution vs. Alternatives
The Burger Wars
Putting ItTogether
Perspective: The Industrial Revolution
For Further Study and Analysis
Chapter 4 Market Pricing
The Peanut Butter Crunch
What Forces Determine Prices in the Marketplace?
Demand (The Consumers' Side of the Market)
Supply (The Sellers' Side of the Market)
Equilibrium
Price-Gouging
What Determines Demand?
Tastes and Preferences
Income
Substitutes and Complements
Population
Pedal Power
What Determines Supply?
Prices and Resources
Technology
Short Run
Long Run
Jojoba: A Desert Weed
Why Do Prices Change?
Shifts in Demand
Shifts in Supply
CC: Oiled and Ready
Putting It Together
Perspective: Adam Smith's Marketplace
For Further Study and Analysis
Unit II MICROECONOMICS
Chapter 5 Earning and Spending: The Consumer
Blowing Smoke Rings
What Determines Income?
Functional Income Distribution
Wage and Salaries
Rent
Interest
Profits
Five Strikes and You're Out
What Choices Do Consumers Make?
Spending Choices
Consumer Sovereignty
Savings Choices
The Channel Race
How Can Consumers Make Better Choices?
Information
Advertising
CC: International Property Rights
Putting It Together
Perspective: Conspicuous Consumption
For Further Study and Analysis
Chapter 6 The Business Firm and Market Structure
Farm Aid
What Are the Forms and Economic Functions of Business Firms?
Forms of Business Organization
The Four Functions of Business
Aging Rockers
What Determines a Firm's Profits?
Costs
Revenue
Profits
Running with the Bulls
How Does Industry Market Structure Affect Price and Output Decisions?
Pure Competition
Differentiated Competition
Pure Monopoly
Shared Monopoly
Crashing the PC Market
Putting It Together
Perspective: The Evolution of the Modern Corporation
For Further Study and Analysis
Chapter 7 Industrial Performance
The Industrial Phoenix
What Determines Industry Performance?
Productivity
Quality
Responsiveness to the Market
Responsiveness to Social Concerns
CC: Eyes Too Big in a Tantalizing Market
How Can Industry Performance Be Improved?
Investment in Capital Equipment
Investment in Human Capital
Employee Involvement
Research and Development
The New Industrial Revolution
What Are the Effects of Market Structure on Industry Performance?
Market Concentration
Aggregate Concentration
Concentration and Industry Performance
Corporate Raiders, LBOs, and the Feeding Frenzy
Putting It Together
Perspective: An Imperfect World
For Further Study and Analysis
Chapter 8 Government and Business
Who Is Building the Information Highway?
How Does the Government Limit Monopoly Power?
Antitrust Legislation
Industrial Consortiums
Public Utility Regulation
Deregulation
Air Warfare
Why Does the Government Produce Goods and Services?
Collective Goods
External Economies
Collective Goods and Equity
The New War between the States
What Is the Role of Government in Protecting the Environment?
Why Pollution Exists
How Pollution Is Controlled
Have We Been Successful?
A Common Problem
Putting It Together
Perspective: The Interstate Highway to Serfdom
For Further Study and Analysis
Chapter 9 Government and Households
Cradle to Grave
What Does the Government Do to Reduce Poverty?
The Distribution of Income
Created Equal But…
What Is the Answer to Poverty?
The Rich Get Richer and the Poor Get Ketchup
What Does the Government Do to Help Older Americans?
Social Security
Social Security Reform
Depending on the Next Generation
What Is the Role of Government in Protecting Consumers and Workers?
Consumer Protection
Worker Protection
Taking Cookies from Strangers
Putting It Together
Perspective: The New Deal
For Further Study and Analysis
Unit III MACROECONOMICS
Chapter 10 Money
That Curious Commodity
What Is Money?
Currency
Demand Deposits
Near Money
Dealing the Cards
What Does Money Do?
Medium of Exchange
Unit of Measure
Store of Value
POW Money
How Is Money Created?
Currency
Private Borrowing
Government Borrowing
How to Create Money
How Is the Supply of Money Controlled?
The Federal Reserve System
Reserve Requirements
Discounting
Open Market Operations
Cheap Money
Putting It Together
Perspective: The Big Bank Controversy
For Further Study and Analysis
Chapter 11 Economic Stability
Movin' On Up!
What Causes Unemployment?
Unemployment
Frictional Unemployment
Structural Unemployment
Inadequate Aggregate (Total) Demand
Natural Rate of Unemployment
Hidden Unemployment
CC: El Desemplio
What Causes Inflation?
Measuring Inflation
Demand-Pull Inflation
Cost-Push Inflation
Monetary Inflation
The High Cost of Loving
Is There a Trade-Off between Unemployment and Inflation?
Phillips Curve
Stagflation
Going Down?
What Are the Consequences of Unemployment and Inflation?
Income Effects of Unemployment
Real Output Effects of Unemployment
Social Effects of Unemployment
Income Effects of Inflation
Real Output Effects of Inflation
Inflation: How High Is Up?
Putting It Together
Perspective: Black Thursday and the Great Crash
For Further Study and Analysis
Chapter 12 The Eonomy's Output
Forecasting or Fortune-Telling?
How Much Does the Economy Produce?
Expenditure Categories
Income Categories
Value Added
Current and Constant Dollar GDP
Shortcomings of GDP
The Roller Coaster Ride
What Determines Domestic Output from the Demand-Side Point of View?
Consumption Demand
Investment Demand
Government Demand
Equilibrium Output
Spending Like There Is No Tomorrow
What Determines Domestic Output from the Supply-Side Point of View?
Say's Law
Incentives
Government Deficits
Squaring the Economic Circle
Putting It Together
Perspective: The Keynesian Revolution
For Further Study and Analysis
Chapter 13 Public Finance
Rx Health Care Reform
On What Do Governments Spend Money?
Size of Government Spending
Federal Spending
State and Local Expenditure
Collective Choices
Where Do Governments Get the Money to Spend?
Federal Government Revenues
State and Local Government Revenues
The Numbers Game
Who Pays for Government Spending
Equity
Efficiency
Incidence
Reflections in the Tax Mirror: Which is the Fairest of Them All?
Putting It Together
Perspective: The Growth of Big Government
For Further Study and Analysis
Chapter 14 Policies for Economic Stability and Growth
The Debt Bogeyman
What Can the Government Do about Unemployment and Inflation?
Fiscal Policy
Monetary Policy
Who's at the Wheel?
How Does Fiscal Policy Help Stabilize the Economy?
Discretionary Fiscal Policy
The Multiplier Effect
Automatic Stabilizers
CC: The Sun Also Sets
How Can Monetary Policy Help Stabilize the Economy?
Monetary Policy Tools
Controlling Interest Rates
Control of the Money Supply
The Timing of Discretionary Policy
CC: Coming Together
How Can Economic Growth Be Increased?
Importance of Economic Growth
Increasing Capital Investment
Increasing Capital Efficiency
Increasing Labor Force Participation Rate
Increasing Investment in Human Capital
Investing in the Future
Putting It Together
Perspective: Monetarism--Does Money Matter?
For Further Study and Analysis
Unit IV WORLD ECONOMICS
Chapter 15 International Trade
Do You Hear a Giant Sucking Sound Yet?
Why Do We Trade with Other Countries?
Absolute Advantage
Comparative Advantage
Specialization
Increasing Costs
CC: Europe Calling
Who Benefits and Who Is Hurt by Foreign Trade?
Consumer Benefits
What Do We Import?
Producer and Worker Benefits
Import-Competing Firms' and Workers' Losses
Mobility of Capital and Labor
Domestic Consumers of Export Industries
Flying Carpets and Grounded Computers
How Do We Restrict Foreign Trade?
Tariffs
Quotas
Nontariff Barriers
Export Embargoes
CC: Protection, Japanese-Style
Should Foreign Trade Be Restricted?
Traditional Protectionist Arguments
Terms of Trade
Neomercantilist Arguments
The Power of Special Interests
Bastiat's Petition
Putting It Together
Perspective: Smoot-Hawley Revisited
For Further Study and Analysis
Chapter 16 International Finance and the National Economy
Alice in the Wonderland of International Finance
How Do We Pay for Imports?
Foreign Exchange Market
Exchange Rates
The Causes of Fluctuations in Exchange Rates
Exchange Rate Risk
CC: Good as Gold
What Happens when Exports and Imports Do Not Balance?
Balance of Payments
International Capital Flows
Going South
What Is the Relationship between International Finance and the Domestic Economy?
The Foreign Sector in the National Economy
The Foreign Sector and National Economic Equilibrium
Selling America
Putting It Together
Perspective: Bring Back Gold
For Further Study and Analysis
Chapter 17 Alternative Economic Systems State Socialism, Soviet-Style
How Is the Former Soviet Union's Economy Being Restructured?
Getting Prices Right
Privatization
Financial Markets
An Accident Waiting to Happen
How Are the Economies of Central and East Europe Being Restructured?
Restructuring the Polish Economy
Hungary
The Other CEE Countries
CC: A Different Shade of Red
How Is the Chinese Economy Being Restructured?
China under Mao
Pragmatism
The Chinese Future
The Odd Couple
Putting It Together
Perspective: The Legacy of Marx
For Further Study and Analysis
Chapter 18 The Less Developed Countries
The Asian Flu
What Are the Characteristics of Less Developed Countries?
Income
Income Distribution
Social Indicators
Consumer Goods
The Dark Continent
What Makes Countries Poor?
Theories of Economic Development
Lack of Physical and Human Capital
Exploitation
Economic Policies
The Sick Man of Asia (India)
What Are the Prospects for the Economic Development of the LDCs?
Industrial Development
Infrastructure
Overpopulation
The Debt Crisis
Environmental Threats
Institutions
Back to the Future
Putting It Together
Perspective: The Malthusian Dilemma
For Further Study and Analysis
Glossary
Index