Essentials of Economics 4th Edition Hubbard Solutions Manual

1. Part 1 Introduction
2. Chapter 1 Economics: Foundations and models
3. Three key economic ideas
4. People are rational
5. People respond to economic incentives
6. Optimal decisions are made at the margin
7. Solved problem 1.1 Apple makes a decision at the margin
8. Scarcity, trade-offs and the economic problem that every society must solve
9. What goods and services will be produced?
10. How will the goods and services be produced?
11. Who will receive the goods and services produced?
12. Centrally planned economies versus market economies
13. The modern ‘mixed’ economy
14. Efficiency and equity
15. Economic models
16. The role of assumptions in economic models
17. Forming and testing hypotheses in economic models
18. Normative and positive analysis
19. Don’t let this happen to you
20. Don’t confuse positive analysis with normative analysis
21. Economics as a social science
22. Making the connection 1.1 Good economics doesn’t always mean good politics
23. Microeconomics and macroeconomics
24. Conclusion
25. An inside look
26. Rise of the machines: What jobs will survive as robots move into the workplace?
27. Chapter summary and problems
28. Chapter 1 Appendix
29. Using graphs and formulas
30. Graphs of one variable
31. Graphs of two variables
32. Formulas
33. Appendix Questions and problems
34. Chapter 2 Choices and trade-offs in the market
35. Production possibility frontiers and real-world trade-offs
36. Graphing the production possibility frontier
37. Increasing marginal opportunity costs
38. Making the connection 2.1 Trade-offs and emergency aid relief
39. Economic growth
40. Comparative advantage and trade
41. Specialisation and gains from trade
42. Absolute advantage versus comparative advantage
43. Don’t let this happen to you
44. Don’t confuse absolute advantage with comparative advantage
45. Comparative advantage and the gains from trade
46. Solved problem 2.1 Comparative advantage and the gains from trade
47. The market system
48. The gains from free markets
49. The market mechanism
50. Making the connection 2.2 Story of the market system in action: I, pencil
51. The role of the entrepreneur
52. The legal basis of a successful market system
53. Protection of private property
54. Making the connection 2.3 Illegal downloads from cyberspace
55. Enforcement of contracts and property rights
56. Conclusion
57. An inside look
58. Expansion and production mix at BMW
59. Chapter summary and problems
60. Part 2 How the market works
61. Chapter 3 Where prices come from: The interaction of demand and supply
62. The demand side of the market
63. Demand schedules and demand curves
64. The law of demand
65. Holding everything else constant: The ceteris paribus condition
66. What explains the law of demand?
67. Variables that shift market demand
68. Making the connection 3.1 The ageing of the Baby Boom generation
69. A change in demand versus a change in quantity demanded
70. The supply side of the market
71. Supply schedules and supply curves
72. The law of supply
73. Variables that shift supply
74. A change in supply versus a change in quantity supplied
75. Market equilibrium: Putting demand and supply together
76. How markets eliminate surpluses and shortages
77. Demand and supply both count
78. Shifts in a curve versus movements along a curve
79. The effect of demand and supply shifts on equilibrium
80. Don’t let this happen to you
81. Remember: A change in a good’s price does not cause the demand or supply curve to shift
82. The effect of shifts in supply on equilibrium
83. The effect of shifts in demand on equilibrium
84. The effect of shifts in demand and supply over time
85. Solved problem 3.1 Demand and supply both count: Pharmacists and accountants
86. Making the connection 3.2 The rise and rise of fitness trackers
87. Solved problem 3.2 Demand and supply both count: The australian housing market
88. Conclusion
89. An inside look
90. Global PC shipments decline for 12th straight quarter but HP bucks fall, Gartner says
91. Chapter summary and problems
92. Chapter 3 Appendix
93. Behavioural economics: Do people make their choices rationally?
94. Pitfalls in decision making
95. Ignoring non-monetary opportunity costs
96. Making the connection 3A.1 Experimental economics: A test of fairness?
97. Business implications of consumers ignoring non-monetary opportunity costs
98. Failing to ignore sunk costs
99. Making the connection 3A.2 A blogger who understands the importance of ignoring sunk costs?
100. Being unrealistic about future behaviour
101. Solved problem 3A.1 How do you get people to save more of their income?
102. Appendix Questions and problems
103. Chapter 4 Elasticity: The responsiveness of demand and supply
104. Price elasticity of demand and its measurement
105. Measuring the price elasticity of demand
106. Elastic demand and inelastic demand
107. An example of calculating price elasticities
108. The midpoint formula
109. Solved problem 4.1 Calculating the price elasticity of demand for wheat using the midpoint formula
110. When demand curves intersect, the flatter curve is more elastic
111. Polar cases of perfectly elastic and perfectly inelastic demand
112. Don’t let this happen to you
113. Don’t confuse inelastic with perfectly inelastic
114. The determinants of the price elasticity of demand
115. Availability of close substitutes
116. Passage of time
117. Making the connection 4.1 The price elasticity of demand for breakfast cereal
118. Luxuries versus necessities
119. Solved problem 4.2 Using price elasticity to analyse the drug problem
120. Definition of the market
121. Share of the good in the consumer’s budget
122. The relationship between price elasticity and total revenue
123. Elasticity and revenue with a linear demand curve
124. Solved problem 4.3 Price and revenue don’t always move in the same direction
125. Estimating price elasticity of demand
126. Other demand elasticities
127. Cross-price elasticity of demand
128. Income elasticity of demand
129. Making the connection 4.2 Using elasticity to analyse the disappearing family farm
130. The price elasticity of supply and its measurement
131. Measuring the price elasticity of supply
132. Determinants of the price elasticity of supply
133. Making the connection 4.3 Why are oil prices so unstable?
134. Polar cases of perfectly elastic and perfectly inelastic supply
135. Using price elasticity of supply to predict changes in price
136. Conclusion
137. An inside look
138. Liquor retailing in Australia
139. Chapter summary and problems
140. Chapter 5 Economic efficiency, government price setting and taxes
141. Consumer surplus and producer surplus
142. Consumer surplus
143. Producer surplus
144. Making the connection 5.1 The consumer surplus from broadband Internet service
145. What consumer surplus and producer surplus measure
146. The efficiency of competitive markets
147. Marginal benefit equals marginal cost in competitive equilibrium
148. Economic surplus
149. Deadweight loss
150. Economic surplus and economic efficiency
151. Government intervention in the market: Price floors and price ceilings
152. Price floors: The example of agricultural markets
153. Price ceilings: The example of rent controls
154. Making the connection 5.2 Price floors in labour markets: The minimum wage
155. Black markets and peer-to-peer sites
156. Don’t let this happen to you
157. Don’t confuse scarcity with a shortage
158. Solved problem 5.1 What is the economic effect of a black market for apartments?
159. The results of government intervention: Winners, losers and inefficiency
160. Positive and normative analysis of price ceilings and price floors
161. The economic impact of taxes
162. The effect of taxes on economic efficiency
163. Tax incidence: Who actually pays a tax?
164. Solved problem 5.2 When do consumers pay all of a sales tax increase?
165. Conclusion
166. An inside look
167. Australian smokers to pay more than $45 for a packet of cigarettes from 2020
168. Chapter summary and problems
169. Part 3 Firms and market structures
170. Chapter 6 Technology, production and costs
171. Technology: An economic definition
172. The short run and the long run in economics
173. The difference between fixed costs and variable costs
174. Making the connection 6.1 Improving inventory control at Bunnings
175. Implicit costs versus explicit costs
176. Making the connection 6.2 Fixed costs in the publishing industry
177. The production function
178. A first look at the relationship between production and cost
179. The marginal product of labour and the average product of labour
180. The law of diminishing returns
181. Making the connection 6.3 Adam Smith’s famous account of the division of labour in a pin factory
182. The relationship between marginal product and average product
183. Graphing production
184. The relationship between short-run production and short-run cost
185. Marginal cost
186. The relationship between marginal cost and average total cost
187. Solved problem 6.1 The relationship between marginal cost and average total cost
188. Graphing cost curves
189. Costs in the long run
190. Economies of scale
191. Long-run average cost curves for bookshops
192. Solved problem 6.2 Using long-run average cost curves to understand business strategy
193. Making the connection 6.4 The colossal River Rouge: Diseconomies of scale at the Ford Motor company
194. Don’t let this happen to you
195. Don’t confuse diminishing returns with diseconomies of scale
196. Conclusion
197. An inside look
198. Tesla: The Gigafactory is the key
199. Chapter summary and problems
200. Chapter 7 Firms in perfectly competitive markets
201. Perfectly competitive markets
202. A perfectly competitive firm cannot affect the market price
203. The demand curve for the output of a perfectly competitive firm
204. Don’t let this happen to you
205. Don’t confuse the demand curve for Farmer Jones’ oats with the market demand curve for oats
206. How a firm maximises profit in a perfectly competitive market
207. Revenue for a firm in a perfectly competitive market
208. Determining the profit-maximising level of output
209. Illustrating profit or loss on the cost curve graph
210. Showing profit on the graph
211. Solved problem 7.1 Determining profit-maximising price and quantity
212. Don’t let this happen to you
213. Remember that firms maximise total profit, not profit per unit
214. Illustrating when a firm is breaking even or operating at a loss
215. Deciding whether to produce or to shut down in the short run
216. Making the connection 7.1 Losing money in the solar panel industry
217. Solved problem 7.2 When to shut down an oil well
218. The supply curve of the firm in the short run
219. The market supply curve in a perfectly competitive industry
220. ‘If everyone can do it, you can’t make money at it’–the entry and exit of firms in the long
221. Economic profit and the entry or exit decision
222. Long-run equilibrium in a perfectly competitive market
223. The long-run supply curve in a perfectly competitive market
224. Increasing-cost and decreasing-cost industries
225. Making the connection 7.2 In the App Store, easy entry makes the long run pretty short
226. Perfect competition and efficiency
227. Productive efficiency
228. Allocative efficiency
229. Dynamic efficiency
230. Solved problem 7.3 How productive efficiency and dynamic efficiency benefit consumers
231. Conclusion
232. An inside look
233. Why the sharing economy could have a hard landing in Australia
234. Chapter summary and problems
235. Chapter 8 Monopoly markets
236. Is any firm ever really a monopoly?
237. Where do monopolies come from?
238. Making the connection 8.1 Does Hasbro have a monopoly on Monopoly?
239. Entry blocked by government action
240. Control of a key resource
241. Network externalities
242. Making the connection 8.2 Are diamond (profits) forever? The De Beers diamond monopoly
243. Natural monopoly
244. How does a monopoly choose price and output?
245. Marginal revenue
246. Profit maximisation for a monopolist
247. Solved problem 8.1 Finding profit-maximising price and output for a monopolist
248. Don’t let this happen to you
249. Don’t assume that charging a higher price is always more profitable for a monopolist
250. Does monopoly reduce economic efficiency?
251. Comparing monopoly and perfect competition
252. Measuring the efficiency losses from monopoly
253. How large are the efficiency losses due to monopoly?
254. Market power and technological change
255. Government policy towards monopolies
256. Trade practices laws and enforcement
257. Mergers: The trade-off between market power and efficiency
258. Making the connection 8.3 Anti-competitive behaviour in the airline cargo industry
259. Regulating natural monopolies
260. Solved problem 8.2 Water restrictions and water supply companies
261. Conclusion
262. An inside look
263. Footy fans stuck with Foxtel until 2022
264. Chapter summary and problems
265. Chapter 8 Appendix
266. Price discrimination
267. The requirements for successful price discrimination
268. Solved problem 8A.1 How Dell Technologies uses price discrimination to increase profits
269. Airlines: The kings of price discrimination
270. Perfect price discrimination
271. Price discrimination across time
272. Making the connection 8A.1 The Internet leaves you open to price discrimination
273. Appendix Questions and problems
274. Chapter 9 Monopolistic competition and oligopoly
275. Demand and marginal revenue for a firm in a monopolistically competitive market
276. The demand curve for a monopolistically competitive firm
277. Marginal revenue for a firm with a downward-sloping demand curve
278. How a monopolistically competitive firm maximises profit in the short run
279. Solved problem 9.1 How not to maximise profit
280. What happens to profit in the long run?
281. How does entry of new firms affect the profits of existing firms?
282. Don’t let this happen to you
283. Don’t confuse zero economic profit with zero accounting profit
284. Making the connection 9.1 The rise and decline and rise of Starbucks
285. Is zero economic profit inevitable in the long run?
286. Solved problem 9.2 Buffalo Wild Wings increase costs to increase demand
287. Comparing perfect competition and monopolistic competition
288. Excess capacity under monopolistic competition
289. Is monopolistic competition inefficient?
290. How consumers benefit from monopolistic competition
291. Oligopoly and barriers to entry
292. Barriers to entry
293. Game theory and oligopoly
294. A duopoly game: Price competition between two firms
295. Firm behaviour and the prisoners’ dilemma
296. Don’t let this happen to you
297. Don’t misunderstand why each manager ends up charging a price of $450
298. Can firms escape the prisoners’ dilemma?
299. Making the connection 9.2 Is there a dominant strategy for bidding on eBay?
300. Solved problem 9.3 Is advertising a prisoners’ dilemma for Coca-Cola and Pepsi?
301. Cartels: the case of OPEC
302. Making the connection 9.3 Is Virgin Australia’s business strategy more important than the structur
303. Conclusion
304. An inside look
305. Booming coffee market moves into consolidation phase
306. Chapter summary and problems
307. Part 4 Markets for factors of production
308. Chapter 10 The markets for labour and other factors of production
309. The demand for labour
310. The marginal revenue product of labour
311. Solved problem 10.1 Hiring decisions by a firm that is a price maker
312. The market demand curve for labour and the factors that shift it
313. The supply of labour
314. The market supply curve of labour and the factors that shift it
315. Equilibrium in the labour market
316. The effect on equilibrium wages of a shift in labour demand
317. Making the connection 10.1 Will your future income depend on which courses you take at university?
318. The effect on equilibrium wages of a shift in labour supply
319. Making the connection 10.2 Should you fear the effect of robots on the labour market?
320. Explaining differences in wages
321. Don’t let this happen to you
322. Remember that prices and wages are determined at the margin
323. Making the connection 10.3 Technology and the earnings of ‘superstars’
324. Compensating differentials
325. Discrimination
326. Trade unions
327. Solved problem 10.2 Is ‘comparable worth’ legislation the answer to closing the gap between men
328. Personnel economics
329. Should workers’ pay depend on how much they work or on how much they produce?
330. Other considerations in setting compensation schemes
331. The markets for capital and natural resources
332. The market for capital
333. Solved problem 10.3 How to receive your payments
334. The market for natural resources
335. Monopsony
336. The marginal productivity theory of income distribution
337. Conclusion
338. An inside look
339. Huge Indian Premier League pay day for England bad boy Ben Stokes
340. Chapter summary and problems
341. Part 5 The role of government
342. Chapter 11 Government intervention in the market
343. What’s good about markets and why does the government intervene?
344. The economic bases for government intervention
345. Market failure and government failure
346. Don’t let this happen to you
347. Just because something is wrong, it doesn’t mean the government has to put it right
348. Deregulation and privatisation
349. Externalities and efficiency
350. The effect of externalities
351. How externalities in production reduce economic efficiency
352. How externalities in consumption reduce economic efficiency
353. Externalities and market failure
354. What causes externalities?
355. The economically efficient level of pollution reduction
356. Making the connection 11.1 The reduction in lead in Melbourne’s air
357. Don’t let this happen to you
358. Remember that it’s the net benefit that counts
359. Do property rights matter?
360. The problem of transactions costs
361. The Coase theorem
362. Making the connection 11.2 The fable of the bees
363. Government policies to deal with externalities
364. Policies for externalities in production
365. Policies for externalities in consumption
366. Command and control and market-based approaches
367. Making the connection 11.3 Should the government tax soft drinks?
368. Solved problem 11.1 Using a tax to deal with a negative externality
369. Licences to pollute?
370. Making the connection 11.4 Can a price on carbon reduce global warming?
371. Four categories of goods
372. The optimal quantity of a public good
373. Common resources
374. Policy for business and individual behaviour that can increase economic efficiency
375. The rule of law
376. Patents, trademarks and copyright protection
377. Making the connection 11.5 Who owns the Wizard of Oz?
378. Asymmetric information
379. Conclusion
380. An inside look
381. Too big to fail: China pledges to set up landmark emissions trading scheme
382. Chapter summary and problems
383. Chapter 12 Social policy and inequality
384. The tax system
385. An overview of the Australian tax system
386. Progressive and regressive taxes
387. Making the connection 12.1 Which groups pay the most in taxes?
388. Marginal and average income tax rates
389. Evaluating taxes
390. Tax incidence revisited: The effect of price elasticity
391. Don’t let this happen to you
392. Remember not to confuse who pays the tax with who bears the burden of the tax
393. Making the connection 12.2 Do companies really bear the burden of the federal company income tax?
394. Solved problem 12.1 The effect of price elasticity on the excess burden of a tax
395. Income distribution and poverty
396. Measuring the distribution of income and poverty
397. The poverty rate in Australia
398. Explaining income inequality
399. Showing the income distribution with a Lorenz curve
400. Problems in measuring poverty and the distribution of income
401. Solved problem 12.2 Are many individuals stuck in poverty?
402. Making the connection 12.3 Is income all that matters?
403. Conclusion
404. An inside look
405. 3.6 million households pay no net tax after churn
406. Chapter summary and problems
407. Part 6 Macroeconomic foundations
408. Chapter 13 GDP: Measuring total production, income and economic growth
409. Gross domestic product measures total production
410. Measuring total production: Gross domestic product
411. Measuring GDP using the value-added method
412. Other measures of total production and total income
413. Solved problem 13.1 Calculating GDP
414. Methods of measuring gross domestic product
415. Production, expenditure and income and the circular-flow diagram
416. Components of GDP
417. Don’t let this happen to you
418. Remember what economists mean by investment
419. An equation for GDP and some actual values
420. Does GDP measure what we want it to measure?
421. Shortcomings in GDP as a measure of total production
422. Making the connection 13.1 Why do many developing countries have such large underground economies?
423. Shortcomings of GDP as a measure of wellbeing
424. Making the connection 13.2 How else can we measure economic wellbeing?
425. Real GDP versus nominal GDP
426. Calculating real GDP
427. Calculating the economic growth rate
428. The GDP deflator
429. Making the connection 13.3 How did the standard of living in Nigeria almost double overnight?
430. Long-run economic growth is the key to rising living standards
431. Making the connection 13.4 The connection between economic prosperity and health
432. Calculating growth rates and the rule of 70
433. What determines the rate of long-run economic growth?
434. Solved problem 13.2 Where does long-run growth come from?
435. Potential GDP
436. What determines how fast economies grow?
437. The per-worker production function
438. Which is more important for economic growth: More capital or technological change?
439. Technological change: The key to sustaining economic growth
440. New growth theory
441. Is economic growth good or bad?
442. Conclusion
443. An inside look
444. The four factors that drag Australia down
445. Chapter summary and problems
446. Chapter 14 Unemployment and inflation
447. Measuring the unemployment rate and the labour force participation rate
448. The labour force survey
449. Problems with measuring the unemployment rate
450. Solved problem 14.1 What would happen if the ABS labour force survey included the military?
451. Trends in labour force participation
452. How long are people usually unemployed?
453. Job creation and job destruction
454. Making the connection 14.1 What explains the increase in welfare recipients?
455. Solved problem 14.2 Correctly interpreting labour force data
456. The costs of unemployment
457. Costs to the economy
458. Costs to the individual
459. The distribution of unemployment
460. Types of unemployment
461. Cyclical unemployment
462. Frictional unemployment and job search
463. Structural unemployment
464. Full employment
465. Don’t let this happen to you
466. Don’t confuse full employment with a zero unemployment rate
467. Explaining frictional and structural unemployment
468. Government policies and the unemployment rate
469. Social security and other payments to the unemployed
470. Labour market regulation and deregulation
471. Minimum wages
472. Trade unions
473. Efficiency wages
474. Making the connection 14.2 Why did Henry Ford pay his workers twice as much as other car manufacture
475. Measuring inflation
476. The consumer price index
477. Is the CPI accurate?
478. Don’t let this happen to you
479. Don’t confuse the price level with the inflation rate
480. The producer price index
481. Using price indexes to adjust for the effects of inflation
482. Solved problem 14.3 What has been happening with real wages in Australia?
483. Does inflation impose costs on the economy?
484. Inflation affects the distribution of income
485. The problem with anticipated inflation
486. The problem with unanticipated inflation
487. Hyperinflation
488. Deflation
489. Making the connection 14.3 What’s so bad about falling prices?
490. What causes inflation?
491. Conclusion
492. An inside look
493. All eyes on inflation next week, but not everything is as it seems . . .
494. Chapter summary and problems
495. Chapter 15 Aggregate demand and aggregate supply analysis
496. The business cycle
497. Some basic business cycle definitions
498. What happens during the business cycle
499. Don’t let this happen to you
500. Don’t confuse short-run fluctuations with long-run trends
501. Aggregate demand
502. Why is the aggregate demand curve downward sloping?
503. Shifts of the aggregate demand curve versus movements along it
504. The variables that shift the aggregate demand curve
505. Don’t let this happen to you
506. Be clear why the aggregate demand curve is downward sloping
507. Making the connection 15.1 Should Germany reduce its reliance on exports?
508. Solved problem 15.1 Movements along the aggregate demand curve versus shifts of the aggregate demand
509. Aggregate supply
510. The long-run aggregate supply curve
511. Shifts in the long-run aggregate supply curve
512. The short-run aggregate supply curve
513. Shifts of the short-run aggregate supply curve versus movements along it
514. Variables that shift the short-run aggregate supply curve
515. Variables that shift the short-run and long-run aggregate supply curves
516. Macroeconomic equilibrium in the long run and the short run
517. Recessions, expansions and supply shocks
518. A dynamic aggregate demand and aggregate supply model
519. What is the usual cause of inflation?
520. Making the connection 15.2 Does technological change create unemployment?
521. Solved problem 15.2 Showing the oil shock of 1974 on a dynamic aggregate demand and aggregate supply
522. Conclusion
523. An inside look
524. Housing boom lifts Harvey Norman’s profit
525. Chapter summary and problems
526. Chapter 15 Appendix
527. The aggregate expenditure model
528. Showing a recession on the 45˚ line diagram
529. Appendix Summary and problems
530. Part 7 Monetary and fiscal policy
531. Chapter 16 Money, banks and the Reserve Bank of Australia
532. What is money and why do we need it?
533. Barter and the invention of money
534. The functions of money
535. Making the connection 16.1 Money in a World War II prisoner-of-war camp
536. What can serve as money?
537. Making the connection 16.2 Coca-Cola dries up as the Zimbabwe currency no longer serves as money
538. How do we measure money today?
539. M1: the narrowest definition of the money supply
540. Broader definitions of money
541. Don’t let this happen to you
542. Don’t confuse money with income or wealth
543. Making the connection 16.3 Are bitcoins money?
544. How do financial institutions create money?
545. Bank balance sheets
546. Using T-accounts to show how a bank can create money
547. The simple deposit multiplier
548. Solved problem 16.1 Showing how banks create money
549. The simple deposit multiplier versus the real-world deposit multiplier
550. An overview of the financial system
551. The role of financial markets and financial intermediaries
552. The Reserve Bank of Australia
553. How the RBA manages financial liquidity and interest rates
554. Exchange rate management
555. Conclusion
556. An inside look
557. Innovation in electronic payments to accelerate demise of cheques
558. Chapter summary and problems
559. Chapter 17 Monetary policy
560. What is monetary policy?
561. The goals of monetary policy
562. The demand for and supply of money
563. The demand for money
564. Shifts in the money demand curve
565. How the RBA manages the supply of cash
566. Equilibrium in the money market
567. The market for loanable funds
568. Making the connection 17.1 Ebenezer Scrooge: Accidental promoter of economic growth?
569. Solved problem 17.1 Are future budget deficits a threat to the economy?
570. A tale of two interest rates
571. Monetary policy and economic activity
572. How interest rates affect aggregate demand
573. Making the connection 17.2 Why did the Global Financial Crisis occur?
574. The effects of monetary policy on real GDP and the price level
575. Can the RBA eliminate contractions and recessions?
576. Using monetary policy to fight inflation
577. Solved problem 17.2 The effects of monetary policy
578. Is monetary policy always effective and fair?
579. Don’t let this happen to you
580. Remember that with monetary policy, it’s the interest rate—not the money—that counts
581. Making the connection 17.3 How does the RBA measure inflation?
582. Is the independence of the Reserve Bank of Australia a good idea?
583. The case for RBA independence
584. The case against RBA independence
585. Conclusion
586. An inside look
587. RBA independence on interest rates: A tick for a resilient economy
588. Chapter summary and problems
589. Chapter 18 Fiscal policy
590. What is fiscal policy?
591. What fiscal policy is and what it isn’t
592. Automatic stabilisers versus discretionary fiscal policy
593. An overview of government spending and taxes
594. Using fiscal policy to influence aggregate demand
595. Expansionary fiscal policy
596. Contractionary fiscal policy
597. Don’t let this happen to you
598. Don’t confuse fiscal policy and monetary policy
599. The multiplier effect and government purchases and tax multipliers
600. The government purchases multiplier
601. A simple formula for the multiplier
602. Summarising the multiplier effect
603. The tax multiplier
604. The effect of changes in tax rates
605. Taking into account the effects of aggregate supply
606. The multipliers work in both directions
607. Making the connection 18.1 The multiplier in reverse: The Great Depression of the 1930s
608. Solved problem 18.1 Fiscal policy multipliers
609. The limits to using fiscal policy to stabilise the economy
610. Does government spending reduce private spending?
611. Crowding out in the short run
612. Crowding out in the long run
613. Making the connection 18.2 Why was the United States’ recession of 2007–2009 so severe?
614. Deficits, surpluses and federal government debt
615. How the federal budget can serve as an automatic stabiliser
616. Should the federal budget always be balanced?
617. Solved problem 18.2 The effect of economic fluctuations on the budget deficit
618. Is government debt a problem?
619. Making the connection 18.3 Government bankruptcy in Europe
620. The effects of fiscal policy in the long run
621. The long-run effects of tax policy
622. Tax simplification
623. The economic effect of tax reform
624. How large are supply-side effects from tax cuts?
625. Conclusion
626. An inside look
627. Japan cabinet approves $175b fiscal boost
628. Chapter summary and problems
629. Chapter 18 Appendix 1
630. Is there a short-run trade-off between unemployment and inflation?
631. The Phillips curve
632. Explaining the Phillips curve with aggregate demand and aggregate supply curves
633. Is the Phillips curve a policy menu?
634. Is the short-run Phillips curve stable?
635. The long-run Phillips curve
636. The role of expectations of future inflation
637. Do workers understand inflation?
638. Appendix 1 Questions and problems
639. Chapter 18 Appendix 2
640. A closer look at the multiplier
641. An expression for equilibrium real GDP
642. A formula for the government purchases multiplier
643. A formula for the tax multiplier
644. The ‘balanced budget’ multiplier
645. The effects of changes in tax rates on the multiplier
646. The multiplier in an open economy
647. Appendix 2 Problems
648. Part 8 The international economy
649. Chapter 19 Comparative advantage and the gains from international trade
650. An overview of international trade
651. The importance of trade to the Australian economy
652. Australian international trade in a world context
653. Making the connection 19.1 The iPhone is made in China . . . or is it?
654. Comparative advantage in international trade
655. A brief review of comparative advantage
656. Comparative advantage and absolute advantage
657. How countries gain from international trade
658. Increasing consumption through trade
659. Solved problem 19.1 The gains from trade
660. Why don’t we see complete specialisation?
661. Does anyone lose as a result of international trade?
662. Don’t let this happen to you
663. Remember that trade creates both winners and losers
664. Where does comparative advantage come from?
665. Government policies that restrict international trade
666. Tariffs
667. Quotas
668. Measuring the economic impact of the sugar quota
669. Solved problem 19.2 Measuring the economic effect of a quota
670. Gains from unilateral elimination of tariffs and quotas
671. Domestic support policies
672. Other barriers to trade
673. The arguments over trade policies and globalisation
674. Why do some people oppose the World Trade Organization?
675. Dumping
676. Making the connection 19.2 The unintended consequences of banning goods made with child labour
677. Radical environmentalism
678. Positive versus normative analysis (once again)
679. Conclusion
680. An inside look
681. China-Australia Free Trade Agreement: outcomes at a glance
682. Chapter summary and problems
683. Chapter 20 Macroeconomics in an open economy
684. The balance of payments: Linking Australia to the international economy
685. The current account
686. The capital account
687. The financial account
688. Why is the balance of payments always zero?
689. Don’t let this happen to you
690. Don’t confuse the balance of trade, the current account balance and the balance of payments
691. Solved problem 20.1 Understanding the arithmetic of open economies
692. The foreign exchange market and exchange rates
693. Equilibrium in the market for foreign exchange
694. Don’t let this happen to you
695. Don’t confuse what happens when a currency appreciates with what happens when it depreciates
696. How do shifts in demand and supply affect the exchange rate?
697. Some exchange rates are not determined by the market
698. Making the connection 20.1 The Chinese yuan: The world’s most controversial currency
699. How movements in the exchange rate affect exports and imports
700. Solved problem 20.2 The effect of changing exchange rates on the prices of imports
701. The real exchange rate
702. Exchange rate systems
703. The current exchange rate system
704. The floating dollar
705. What determines exchange rates in the long run?
706. Making the connection 20.2 The Big Mac theory of exchange rates
707. The four determinants of exchange rates in the long run
708. Making the connection 20.3 Greece and Germany: Diverse economies, common currency
709. The international sector and national saving and investment
710. Current account balance equals net foreign investment
711. Domestic saving, domestic investment and net foreign investment
712. The effect of a government budget deficit on investment
713. Is Australia’s current account deficit a problem?
714. Making the connection 20.4 International debt relief for poor countries
715. Monetary policy and fiscal policy in an open economy
716. Monetary policy in an open economy
717. Fiscal policy in an open economy
718. Conclusion
719. An inside look
720. Brexit tipped to push $A higher, RBA to cut rate
721. Chapter summary and problems
722. Glossary
723. Index

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