Page 917 - Krugmans Economics for AP Text Book_Neat

INDEX I-7

Labor strike, 129 Long-run aggregate supply scenario analysis, 446–448 Marginal productivity
Labor supply curve (LRAS), secondary effects, 441–442, theory of income
shifts, of curve, 697–698 184–187, 444 445–446 distribution, 692–693,
wages and, 696–697 classic model of the price starting point, 441–443 711
work versus leisure, 695–696 level, 322–323 structure for, 441–446 discrimination, 714–715
Labor supply curve, shifts of, long-run economic growth, Macroeconomic models efficiency wages, 714
697–698 399–401 classical, 343–344, 355–357 market power, 713–714
Labor unions, 129–130 long-run macroeconomic classical versus Keynesian, objection to, 716–717
Laffer curve, 357 equilibrium, 194 345 viability of, 717
Land, 3 money supply increase, Keynesian, 344–347, 355–357 wage disparities in practice,
Land, capital markets and 316–317 modern consensus, 355–359 715–716
demand in, 690–691 versus short-run, 186–187 monetarism, 355–357 wage inequality and, 711–713
equilibrium in, 692 Long-run average total cost, monetary policy versus fiscal Marginal propensity to con-
marginal productivity theory, 562, 564 policy, 355–357 sume (MPC),
692–693 Long-run average total cost natural rate hypothesis, 159–160, 162–164
supply in, 691–692 curve, 561–562 350–351 Marginal propensity to save
Latin America Long-run costs new classical economics, 351, (MPS), 159–160
economic growth, 381–382 concepts and measures, 564 356 Marginal rate of substitution
human capital, 386 returns to scale, 562–563 new Keynesian economics, (MRS), 792–795,
transfer payments, 412 versus short-run, 559–563 352, 356 797–799
Law of demand, 50, 173 sunk costs, 563–564 political business cycle, 351 Marginal revenue, 537–538,
income effect, 459–460 Long-run economic growth, rational expectations, 352 608–612
substitution effect, 458–459 365–371. See also real business cycle theory, Marginal revenue curve,
Law of supply, 60 Economic growth 352–353 538–539
LeBron, James, 4–5 AD-AS model, 399–400 supply-side economics, 357 Marginal revenue product, 703
Lehman Brothers, 260 long-run aggregate supply Macroeconomic policy Marginal revenue product of
Leisure, 696 curve, 399–401 activism, 346 labor (MRPL), 700
Level of prices, 134–138 macroeconomic models, Macroeconomics, 5 Marginal social benefit of a
Leverage, 258 396–401 exchange rates, 435–439 good, 738
Liability, 224 production possibilities five key questions, 355–359 Marginal social benefit of
banks, 244 curve, 396–400 international business cycle, pollution, 724–725
Federal Reserve, 264–265 productivity, 370–371 438 Marginal social cost of a
implicit, 303–304 real GDP per capita, compar- introduction, 10–14 good, 739–740
License, 88 ison, 379–383 long-run economic growth, Marginal social cost of pollu-
Lieberman, Joseph, 393 versus short-run fluctuations, 396–401 tion, 724
Life insurance company, 228 400–401 versus microeconomics, 5 Marginal utility, 513–514
Life-cycle hypothesis, 166 sources, 370–371 open-economy, 407 Marginal utility curve, 513
The Limits to Growth (Club of Long-run industry supply policy, 199–201 Marginal utility per dollar,
Rome), 389 curve, 601–605 Mad Money, 295 518–521
Linear curve, slope of, 37–38 Long-run macroeconomic Maddison, Angus, 385 Marginally attached workers,
Linear relationship, 36 equilibrium, 194–196 Malthus, Thomas, 378, 389 120
Liquid, 226 Long-run market equilibri- Marc, 436 Market basket, 142–145, 147,
Liquidity, 225–226 um, 601–603, 605 Marginal analysis, 3 425–426
Liquidity preference model Long-run Phillips curve Marginal benefit, 3, 537 Market, definition of, 48
of the interest rate, (LRPS), 335–337 Marginal cost, 3, 537, 550–552, Market demand curve, 55
273–274, 284–286 Long-Term Capital 564 Market economy, 2
Liquidity trap, 339–340, 347 Management (LTCM), Marginal cost curve, Market equilibrium, 67
Lira, Turkey, 322 258 538–539, 554, 556–557 Market failure, government
Loan, 224, 226 Long-term interest rates, 270 Marginal cost pricing, 757 and, 723
Loanable funds Loss, 533 Marginal decisions, 3 Market power, 713–714
capital inflow, 281, 413–415 Lost Decade, 340–341 Marginal external benefit, Market price, 67–69, 590–592
demand for, 278 Lottery, present value and, 241 738 Market share, 569
demand shifts, 280–281, 444 LRAS. See Long-run aggregate Marginal external cost, Market structure, types of,
financial account, 413–414 supply curve 739–740 567–575
Fisher effect, 283 LTCM (Long-Term Capital Marginal factor cost, 703 Market supply curve, 64
government borrowing, 280 Management), 258 Marginal factor cost of labor Market-clearing price, 66. See
inflation, 282–284 Lucas, Robert, 352 (MFCL), 700–702 also Equilibrium price
interest rates, 277–286 Lump-sum tax, 211, 508 Marginal physical product, 683 Martin, William McChesney,
supply of, 279 Marginal private benefit, 738 255, 358
supply shifts, 281–282, 444 M Marginal private cost, Mauritius, economic growth,
Loanable funds market, M1, M2, 234–235, 243, 268 739–740 383
277–286, 413–414, 444 Marginal product, 543 Maximum, of curve, 40
Loanable funds model, Macroeconomic analysis factor demand and, 684–686 McCain, John, 393
initial effects, 441–442, 445
413–414 value of, 682–684, 703 McDonald’s, 54, 271–272
Loan-backed securities, 227 long-run effects, 441–442, Marginal product of labor, Big Mac index, 425–426
445–446
Long run, 542 543–545, 682–683 Montana, 124
pivotal event, 441–445