Correlations

Economics: Explore & Apply, Enhanced Edition ©2005

Ronald Ayers and Robert Collinge

Macroeconomics

Correlated to: AP* Macroeconomics Preliminary Course Outline 2004–2005

I. Basic Economic Concepts

A. Scarcity, choice, and opportunity cost	Scarcity and choice, 2–3, 32–33; opportunity cost, 32. Opportunity cost appears several times throughout the book.
B. Production possibilities curve	33–41, 46–49
C. Comparative advantage, specialization, and exchange	43–46 comparative advantage and exchange rates, 427–428 policy toward trade, Chapter 16
D. Demand, supply, and market equilibrium	Chapter 3
E. Macroeconomic issues: business cycle, unemployment, inflation, growth	114–115 Business cycle 130–133 Unemployment, Chapter 6 Inflation, Chapter 7 Growth, Chapter 2 and Chapter 12

II. Measurement of Economic Performance

A. National income accounts
1. Circular flow, domestic product, and ?	Circular flow, 41–43, 119–121, 266–267 Imports and exports, 44, 94
2. Gross domestic product	Chapter 5
3. Components of gross domestic product	116–118
4. Real versus nominal gross domestic product	127–129
B. Inflation measurement and adjustment
1. Price indices	175–187
2. Nominal and real values	179–180
3. Costs of inflation	172–175
C. Unemployment
1. Definitions and measurement	146–154
2. Types of unemployment	154–156
3. Natural rate of unemployment	157–159

III. National Income and Price Determination

A. Aggregate demand
1. Determinants of aggregate demand	200–203
2. Multiplier and crowding-out effects	227–231 Multiplier Effect, 260–263 Tax Multiplier, 265–267 Balanced–budget Multiplier, 268–269
B. Aggregate supply
1. Short-run and long-run analyses	196–199, 203–205, 234–243
2. Sticky versus flexible wages and prices	208–209
3. Determinants of aggregate supply	203–205, 234–238
C. Macroeconomic equilibrium	205–207, 236
1. Real output and price level	194–196, 207
2. Short and long run	196–199, 242–243
3. Actual versus full-employment output	209–210
4. Economic fluctuations	Business cycle 130–133, 226–243

IV. Financial Sector

A. Money, banking, and financial markets	Chapter 13
1. Definition of financial assets: money, stocks, bonds	Money, 41, 326 Bonds, 332 Stocks, 170 (micro volume)
2. Time value of money	174
3. Measures of money supply	327–329
4. Banks and creation of money	330–335
5. Money demand	354–355
6. Money market	355
7. Loanable funds market	355–356, 365–368
B. Central bank and control of the money supply	Chapter 13
1. Tools of central bank policy	335–343
2. Quantity theory of money	358–359
3. Real versus nominal interest rates	182, 366

V. Inflation, Unemployment, and Stabilization Policies

A. Fiscal and monetary policies	Chapter 9, Fiscal Policy and Short-run Instability Chapter 11, Fiscal Policy in Action Chapter 14, Monetary Policy and Price Stability
1. Demand-side effects	Demand-side inflation and deflation, 212–213 Demand-push inflation, 236 Complications in conducting monetary policy, 364
2. Supply-side effects	Supply-side inflation and deflation, 212–213 Cost-push inflation, 238 Complications in conducting monetary policy, 364
3. Policy mix	232–233 (Fiscal Policy Choice)
4. Government deficits and debt	243–246
B. Inflation and unemployment	Unemployment, Chapter 6 Inflation, Chapter 7
1. Types of inflation
—a. Demand-pull inflation	Demand-pull inflation, 236–238
—b. Cost-push inflation	Cost-push inflation, 238–239
2. The Phillips curve: short-run versus long-run	240–242
3. Role of expectations	242

VI. Economic Growth and Productivity

	Chapter 12
A. Investment in human capital	306–308
B. Investment in physical capital	308
C. Research and development, and technological progress	314
D. Growth Policy	311–315

VII. Open Economy: International Trade and Finance

	Chapter 15
A. Balance of payments accounts
1. Balance of trade	378
2. Current account	378–379
3. Capital account	379–380
B. Foreign exchange market
1. Demand for and supply of foreign exchange	385
2. Exchange rate determination	386–388
3. Currency appreciation and depreciation	388–392
C. Net exports and capital flows	378–384 (Measuring International Transactions; The Impact of International Commerce)
D. Links to financial and goods markets	381–382, 244–246