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| Preface | |
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| The Approach to Macroeconomics | |
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| The Behavior of Output, Unemployment, and the Price Level in the United States | |
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| Some Key Facts about U.S. Business Fluctuations | |
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| The Approach to Macroeconomics | |
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| A Note on Mathematics and Economic Reasoning | |
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| Elements of National-Income Accounting | |
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| Important Terms and Concepts | |
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| Microeconomic Foundations And The Basic Market-Clearing Model | |
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| Work Effort, Production, and Consumption--The Economics of Robinson Crusoe | |
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| Production Technology | |
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| Tastes for Consumption and Leisure | |
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| Deciding How Much to Work | |
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| Shifts in the Production Function | |
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| Wealth Effects | |
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| Substitution Effects for Work versus Consumption | |
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| Combining the Wealth and Substitution Effects | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The Behavior of Households with Markets for Commodities and Credit | |
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| The Commodity Market | |
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| The Credit Market | |
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| Budget Constraints | |
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| Preferences for Consuming Now versus Later | |
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| Choosing Consumption over Two Periods | |
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| Wealth and Substitution Effects | |
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| Choosing Work Effort at Different Dates | |
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| Budget Constraints over Many Periods | |
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| Choices over Many Periods | |
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| Shifts in the Schedule for Labor's Marginal Product | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The Demand for Money | |
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| The Nature of a Monetary Economy | |
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| A Model of Optimal Cash Management | |
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| Generalizations and Implications for Money Demand | |
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| The Velocity of Money | |
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| Empirical Evidence on the Demand for Money | |
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| Money and Households' Budget Constraints | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The Basic Market-Clearing Model | |
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| Aggregate-Consistency Conditions and the Clearing of Markets | |
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| Clearing the Commodity Market | |
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| The Quantity of Money Equals the Quantity Demanded | |
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| General Market Clearing | |
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| Supply Shocks | |
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| Changes in the Stock of Money | |
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| Changes in the Demand for Money | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The Labor Market | |
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| Setup of the Labor Market | |
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| The Demand for Labor | |
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| Labor Supply and Consumption Demand | |
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| Clearing of the Labor Market | |
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| Clearing of the Commodity Market | |
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| The Behavior of the Real Wage Rate | |
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| Nominal Wage Rates | |
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| The Labor Market in the Macroeconomic Model | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Inflation | |
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| An Introduction to Inflation and Interest Rates | |
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| Cross-Country Data on Inflation and Monetary Growth | |
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| U.S. Time-Series Data on Inflation and Monetary Growth | |
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| Actual and Expected Inflation | |
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| Real and Nominal Interest Rates | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Money, Inflation, and Interest Rates in the Market-Clearing Model | |
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| Incorporation of Inflation and Monetary Growth into the Model | |
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| Market-Clearing Conditions | |
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| The Superneutrality of Money | |
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| Monetary Growth, Inflation, and the Nominal Interest Rate | |
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| The Dynamics of Inflation | |
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| Real Effects of Inflation | |
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| Summary | |
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| Appendix (optional): The Wealth Effects from the Monetary Terms | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Business Fluctuations, Unemployment, And Economic Growth | |
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| Investment and Real Business Cycles | |
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| The Capital Stock and Investment in the United States | |
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| Real GDP and Its Components during Recessions | |
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| Capital in the Production Function | |
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| Investment Goods and Consumer Goods | |
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| Depreciation | |
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| Characteristics of Existing Capital | |
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| Investment Demand | |
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| Investment and Households' Budget Constraints | |
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| Clearing of the Commodity Market | |
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| Real Business Cycles | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Unemployment | |
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| A Model of Job Finding | |
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| Job Separations | |
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| Job Separations, Job Finding, and the Natural Unemployment Rate | |
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| The Behavior of U.S. Unemployment Rates | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Economic Growth | |
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| Changes in the Stock of Capital | |
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| Convergence | |
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| Population Growth | |
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| Technological Progress | |
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| Evidence from U.S. History | |
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| Evidence on Convergence from the U.S. States and Regions of Western Europe | |
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| Evidence on Convergence across Countries | |
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| Recent Theories of Economic Growth (optional) | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Government Behavior | |
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| Government Consumption and Public Services | |
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| Data on Government Expenditures | |
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| The Government's Budget Constraint | |
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| Households' Budget Constraints | |
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| Temporary Changes in Government Consumption | |
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| Clearing of the Commodity Market | |
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| Evidence from Wartime Experiences | |
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| Permanent Changes in Government Consumption | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Taxes and Transfers | |
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| Sources of Government Revenues in the United States | |
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| Types of Taxes | |
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| An Income Tax in the Theoretical Model | |
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| A Change in the Tax Rate | |
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| Transfer Payments | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The Public Debt | |
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| The Behavior of the Public Debt in the United States and the United Kingdom | |
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| Characteristics of Government Bonds | |
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| The Government's Budget Constraint | |
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| Public Debt and Households' Budget Constraints | |
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| The Effect of a Deficit-Financed Tax Cut | |
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| Open-Market Operations | |
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| Why Does the Public Debt Matter? | |
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| The Timing of Taxes | |
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| The Conventional View of a Deficit-Financed Tax Cut | |
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| Social Security and Saving | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The International Economy | |
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| World Markets in Goods and Credit | |
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| The United States as an Open Economy | |
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| The Role of the International Credit Market | |
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| Fiscal Policy in the World Economy | |
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| The Terms of Trade | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Exchange Rates | |
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| Different Monies and Exchange Rates | |
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| Purchasing-Power Parity | |
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| Interest-Rate Parity | |
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| Fixed Exchange Rates | |
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| Flexible Exchange Rates | |
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| Purchasing-Power Parity under Flexible and Fixed Exchange Rates | |
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| Exchange Rates and the Current-Account Balance | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Interactions Between The Monetary Sector And The Real Sector | |
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| Financial Intermediation | |
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| Checkable Deposits and M1 | |
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| Financial Intermediaries and the Credit Market | |
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| The Federal Reserve System | |
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| Effects of Federal Reserve Actions | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The Interplay Between Nominal and Real Variables -- What Is the Evidence? | |
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| The Phillips Curve | |
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| The Relationship between Unemployment and the Rates of Change of Wages, Prices, and Money--Long-Term Evidence for the United Kingdom and the United States | |
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| Cross-Country Relations between Nominal and Real Variables | |
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| The Cyclical Behavior of Money and the Price Level | |
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| Does Money Affect the Economy, or Is It the Economy That Affects Money? | |
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| Implications of the Evidence | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Money and Business Fluctuations in the Market-Clearing Model | |
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| The Structure of a Model with Local Markets | |
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| Imperfect Information about Money and the General Price Level | |
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| Rules versus Discretion | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| The Keynesian Theory of Business Fluctuations | |
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| A Simple Keynesian Model | |
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| Determination of Output in the Keynesian Model | |
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| IS/LM Analysis and the Role of the Interest Rate | |
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| Cyclical Properties of the Keynesian Model | |
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| Sticky Prices and New Keynesian Economics | |
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| Summary | |
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| Important Terms and Concepts | |
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| Questions and Problems | |
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| Bibliography | |
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| Glossary | |
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| Author Index | |
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| Subject Index | |