Page 15 - Krugmans Economics for AP Text Book_Neat

Inventories and Unplanned Investment Spending 168 Module 21 Fiscal Policy and the Multiplier 209
FYI: Interest Rates and the U.S. Housing Boom 169 Using the Multiplier to Estimate the Influence of
Module 16 AP Review 170 Government Policy 209
Multiplier Effects of an Increase in Government
Purchases of Goods and Services 209
Module 17 Aggregate Demand: Introduction and
Determinants 172 Multiplier Effects of Changes in Government
Transfers and Taxes 210
Aggregate Demand 172
How Taxes Affect the Multiplier 211
Why Is the Aggregate Demand Curve Downward
Sloping? 173 FYI: About That Stimulus Package … 213
Shifts of the Aggregate Demand Curve 174 Module 21 AP Review 213
Section 4 Review 215
Module 17 AP Review 177

Section 5
Module 18 Aggregate Supply: Introduction and
Determinants 179 The Financial Sector 221
Aggregate Supply 179
The Short-Run Aggregate Supply Curve 179 Module 22 Saving, Investment, and the
Shifts of the Short-Run Aggregate Supply Curve 181 Financial System 222
The Long-Run Aggregate Supply Curve 184 Matching Up Savings and Investment Spending 222
From the Short Run to the Long Run 186 The Savings–Investment Spending Identity 222
FYI: Prices and Output During the Great Depression 188 The Financial System 224
Module 18 AP Review 188 Three Tasks of a Financial System 225
Types of Financial Assets 226
Module 19 Equilibrium in the Aggregate Financial Intermediaries 227
Demand—Aggregate Supply Model 190 Module 22 AP Review 229
The AD–AS Model 190
Short-Run Macroeconomic Equilibrium 190 Module 23 Definition and Measurement of Money 231
Shifts of Aggregate Demand: Short-Run Effects 191 The Meaning of Money 231
Shifts of the SRAS Curve 192 What Is Money? 231
Long-Run Macroeconomic Equilibrium 194 Roles of Money 232
FYI: Supply Shocks Versus Demand Shocks in Practice 197 Types of Money 233
Module 19 AP Review 197 FYI: The History of the Dollar 234
Measuring the Money Supply 234
Module 20 Economic Policy and the Aggregate FYI: What’s with All the Currency? 235
Demand—Aggregate Supply Model 199 Module 23 AP Review 235
Macroeconomic Policy 199
Policy in the Face of Demand Shocks 200 Module 24 The Time Value of Money 237
Responding to Supply Shocks 200 The Concept of Present Value 237
FYI: Is Stabilization Policy Stabilizing? 201 Borrowing, Lending, and Interest 237
Fiscal Policy: The Basics 202 Defining Present Value 238
Taxes, Government Purchases of Goods and Services, Using Present Value 240
Transfers, and Borrowing 202
FYI: How Big Is That Jackpot, Anyway? 241
The Government Budget and Total Spending 204
Module 24 AP Review 241
Expansionary and Contractionary Fiscal Policy 204
A Cautionary Note: Lags in Fiscal Policy 206
Module 25 Banking and Money Creation 243
Module 20 AP Review 207
The Monetary Role of Banks 243

CONTENTS xiii