Page 914 - Krugmans Economics for AP Text Book_Neat

I-4 INDEX

Europe (continued) External cost, 726–727 stock bubble, 359 average cost, 552–555
monetary neutrality, 318 Externalities, 727 target federal funds rate, 273, cost curves, 548–550
unemployment benefits, 130 pollution, economics of, 307–309 marginal cost, 550–552
European Central Bank (ECB), 724–729 unconventional policy, 359 marginal cost curve, slope,
253 pollution, policies and, U.S. Treasury, 324 556–557
European Commission, 83 731–736 Federal Reserve Bank of New minimum average total cost,
European Union (EU), 653 private solutions to, 728–729 York, 255–256, 258 555–556
Excess capacity, 665 production, consumption Federal Reserve Banks, 255–256 short-run versus long-run,
Excess demand. See Shortage and, 736–740 Federal Reserve Board, 134 559–563
Excess reserves, 249 Federal Reserve districts, sunk costs, 563–565
Excess supply. See Surplus F 255–256 First Street Bank, 244–248
Exchange market interven- Factor demand Federal Reserve System, Fiscal policy, 176–177,
tion, 430–431 253–260, 262–266 202–207
Exchange rate, 419–427. See economy’s factors of counterfeit money, 265 aggregate demand curve, 209
production, 680–682
also Foreign exchange marginal productivity and, creation, 253–255 budget balance, 296–300
market discount rate, 263–264 contractionary, 204–206,
682–688
automobile industry, 427 shifts, in curve, 686–688 effectiveness of, 256–257 209
balance of payments, 419, Factor distribution of functions of, 262–266 deficits, 296–305
421–423 monetary policy, 262–266 demand/supply shocks,
income, 681–682
Big Mac index, 425–426 Factor income, 409–410, 681 open market operations, 200–201
equilibrium, 420–423 Factor markets, 103, 679–680 264–266 discretionary, 212, 356–357
nominal, 423–426, 429 Factor prices, 680–681 reserve requirement, 263 expansionary, 204–205, 209,
real, 423–425 structure of, 255–256 355–356
Exchange Rate Mechanism, Factors of production, 3, 680 Treasury bills, 264–265, 324 fixed money supply, 349
Fannie Mae, 257
436, 439 Federal Trade Commission Act government spending,
Exchange rate, policy Farm veterinary services, com- of 1914, 756 202–205
petition and, 65
devaluation, revaluation, Farming industry Fiat money, 234 lags, 206–207
435–437 Fidelity Investments, 228 long-run implications,
exchange market interven- decline, in U.S., 477 Final buyers, 108 300–305
implicit cost of, 533
tion, 430–431 Final goods and services, macroeconomic theories,
fixed, 429–432, 435–437 perfect competition, 596 106–107 356–357
price floors, 82–84
floating, 429, 431–432, FDIC (Federal Deposit Finance, international. See versus monetary policy,
437–438 Open economy 355–357
foreign exchange controls, Insurance Corporation), Financial account, 411–414 multiplier, 209–213
229, 246
431 Financial asset, 224, 226–227 public debt, 300–302
foreign exchange reserves, The Fed. See Federal Reserve Financial capital, 413 taxes, 202–205
Federal budget, 204
430–431 Financial crisis of 2008, unemployment reduction,
international business cycle, balance, 296–300 258–260 356
deficit, 296–305
438 Financial intermediary, Fiscal year, 300
macroeconomic, 435–439 future demands, 304 227–229, 243 Fisher effect, 283, 339
Exchange rate regime, Federal debt, 300–304 Financial markets, 105, 224, Fisher, Irving, 283, 338–339
problems with, 300–301
429–432, 435–439 277 Fixed cost, 548
World War II, 303
Excise tax, 499–500 Federal Deposit Insurance Financial risk, 225 concept and measures of,
cost of, 506–508 Corporation (FDIC), Financial sector 564
price elasticities and, 502–504 229, 246 banking, 243–251 in perfect competition, 595
quantities and prices and, Federal funds market, 263 Federal Reserve System, short-run versus long-run
500–502 253–260, 262–266 and, 559–562
revenue from, 505–506 Federal funds rate, 263, financial system, 224–229 Fixed exchange rate,
307–313
Excludable, 743 Federal Open Market interest rate models, 429–432, 435–437
Expanded circular-flow dia- Committee, 255 273–274, 277–286 Fixed input, 542
gram, 103–106 loanable funds, 277–286 Flat-bottomed paper bag, pro-
Expansionary fiscal policy, economic contraction, money, 231–235 ductivity and, 371
expansion and, 313
204–205, 209, 355–356 money creation, 247–251 Floating exchange rate, 429,
Expansionary monetary money and interest rates, money market, 268–275 431–432, 437–438
273, 307, 309
policy, 310, 355–356 money, time value, 237–241 Florida, housing boom, 157
Expansions, 10–11 Federal Reserve, 234–235, 295 savings, investment, 222–224 Flu vaccine, consumer demand,
assets, liabilities, 264–265
Expectation changes banks, 243–244, 246–247, Financial system, 224–229 457
aggregate demand curve, 175 249–250 financial assets, 224, Ford, Henry, 379, 670
demand curve, 54–55 central bank targets, 358 226–227 Ford Motors U.K., 412
supply curve, 63 financial intermediaries, Foreign exchange. See Exchange
Expected deflation, 339 financial crisis of 2008, 227–229 rate
258–260
Expected inflation, 333–336 housing boom, 169, 258–259 liquidity, 225–226 Foreign exchange controls,
Explicit cost, 530–531 monetary policy, interest risk, 225 431
Exports, 105–106, 108–109 rate, 307–313 transaction costs, 225 Foreign exchange market,
External benefits, 726–727, money supply, 273–274 Firm, 103 419–423, 444. See also
727 Firm costs Exchange rate
press release, 273