Chapter 1 Important Macroeconomic Variables Aggregate Demand Aggregate Supply 1
Ⅰ．Macroeconomics and Its Goals 1
Ⅱ．Important Variables in Macroeconomics 3
1．Price Level 3
2．Total Output 7
3．Employment and Unemployment Rate 11
4．Interest Rate 12
5．The Relationships Among Output,Employment and Interest Rate 12
Ⅲ．Aggregate Demand 13
1．Component of Aggregate Expenditure 17
2．Effects of Real Balance,Inter-temporal Substitution and International Substitution 20
3．Shifts in Aggregate Demand Curve 24
Ⅳ．Aggregate Supply 29
1．Long-run Aggregate Supply 30
2．Short-run Aggregate Supply 31
3．Shifts in the Aggregate Supply Curve 35
Ⅴ．Macroeconomic Equilibrium 39
1．The Determinant of Real GNP and Price Level 39
2．Macroeconomic Equilibrium and Full Employment 42
3．Effects of Changes in Aggregate Demand on the Levels of Real GNP and Price Level 45
4．The Effects of a Change in Short-run Aggregate Supply on Real GNP and Price Level 48
Ⅵ．Measuring National Income 50
1．The Expenditure Approach 51
2．The Income Approach 55
3．Other Aggregates in National Income Accounts 57
4．Limitations of the GNP 60
Chapter 2 Determinants of National Income Theory 64
Ⅰ．Total Expenditure and Its Components 64
Ⅱ．Consumption Function 66
1．Short-run and Long-run Consumption Functions 67
2．Average Propensity to Consume 69
3．Marginal Propensity to Consume 70
Ⅲ．Saving Function 74
1．Short-term and Long-term Saving Functions 74
2．Average Propensity to Save 77
3．Marginal Propensity to Save 78
4．Shifts in Consumption Schedule 79
Ⅳ．The Planned Expenditure Function 82
Ⅴ．Investment Expenditure 83
1．Factors affecting Investment 87
2．Categories of Investment and Their Determinants 92
Ⅵ．Net Export 100
1．Determinants of Exports 100
2．Determinants of Imports 102
3．Net Export Function 102
Ⅶ．Determining the Equilibrium Level of National Income 104
1．Autonomous Expenditure and Induced Expenditure 110
Ⅰ．Changes in the Curve of Planned Expenditure and in National Income 110
Chapter 3 Changes in National Income and Fluctuations of Economic Cycle 110
2．Planned Aggregate Expenditure and Price Level 111
3．Changes in Aggregate Expenditure Schedule 114
4．Injections and Leakages 116
Ⅱ．Multiplier 117
Ⅲ．Equilibrium National Income Under Unemployment and at Full Employment 125
1．GNP Gap 126
2．Deflationary Gap 127
3．Inflationary Gap 129
Ⅳ．The Theory of Economic Cycle 131
1．Change in Consumption 132
2．Change in Investment and in Government Expenditure 135
3．The Fluctuations of Business Cycle 136
4．The Multiplier-Accelerator Model 140
Ⅰ．Types of Unemployment 147
1．Frictional Unemployment 147
Chapter 4 Unemployment and Inflation 147
2．Structural unemployment 148
3．Cyclical unemployment 151
4．Effects of Unemployment 154
Ⅱ．Types of Inflation 159
1．Moderate Inflation 159
2．Galloping Inflation 159
3．Hyper Inflation 160
4．Demand-pull Inflation 160
5．Cost-push Inflation 162
6．Structural Inflation 163
7．Effects of Inflation 164
Chapter 5 Macro-Monetary Policy and Macro-Fiscal Policy 172
Ⅰ．Macro-Monetary Policy 172
1．Supply of Money 174
2．Demand For Money 185
3．The Supply of and Demand for Money Determines Interest Rate 193
4．Three Instruments of Monetary Policy 194
5．Types of Monetary Policy 197
Ⅱ．Macro-Fiscal Policy 203
1．Five Tools of Fiscal Policy 203
2．Application of Tax Policy and Fiscal Expenditure Policy 208
3．Automatic Stabilizers 213
4．The Combination of Fiscal Policy and Monetary Policy 216
5．Limitations of Monetary and Fiscal Policies 225
Chapter 6 Determinants of National Income Under an Open Economy and Interaction of Commodity Market and Money Market 229
Ⅰ．The Determination of National Income in an Open Economy 229
1．The Degree of Openness and Its Effects on the Economy 229
2．Import Function 232
3．Foreign Trade Multiplier 236
Ⅱ．Balance of International Payments 239
1．Important Sections of Balance of Payments 240
2．Equilibrium Balance of Payments 244
3．Adjustments in Balance of Payments 245
Ⅲ．Foreign Exchange Rate 250
1．What Is Exchange Rate 252
2．Determination of Exchange Rates 256
3．The Supply of and Demand for Foreign Exchange 261
Ⅳ．International Monetary System 262
1．Fixed Exchange Rate Regime 263
2．Floating Exchange Rate Regime 265
Ⅴ．Interaction of Commodity Market and Money Market 266
1．IS Curve—The Equilibrium Commodity Market 267
2．LM Curve—The Money Market Equilibrium 270
3．IS—LM Model—The General Equilibrium of Commodity Market and Money Market 275
Chapter 7 Economic Growth 280
Ⅰ．Contents of Economic Growth 280
1．Definition of Growth 280
2．Classification of Countries 284
3．Importance of Growth Rate 288
4．The Development of Economic Growth Theory 294
Ⅱ．Harrod—Domar Model 296
1．Basic Forms of Harrod—Domar Model 297
2．Conditions for Steady Economic Growth Rate 299
3．Short-run Fluctuation Cause 299
4．Long-run Fluctuation Cause 301
Ⅲ．Sources of Growth 303
1．Natural Resources 304
2．Labor 306
3．Capital Accumulation 307
4．Technical Progress 313
Ⅳ．Several Pairs of Relations to Be Resolved 317
1．Population and Economic Growth 318
2．Ecological Environment and Economic Growth 320
3．Savings/Foreign Money and Economic Growth 322