IMS Content 1.2 <langstring xml:lang="en-US">WinEcon - Introduction to Macroeconomics</langstring> A fully-interactive introduction to the principles of macroeconomics. Interactive macroeconomics course WinEcon - Introduction to Macroeconomics What is Economics Introduction to Economics Introduction Introduction to Economics The Economic Approach - Rationality Objectives and Actions: The Squash Club Objectives and Actions: Allocating a Health Budget Objectives and Actions: Looking Ahead Economic Modelling Summary Macroeconomic Data Introduction to Macroeconomic Data Introduction Macroeconomic Variables Introduction Trended and Non-Trended Variables The Behaviour of Real and Nominal Variables Nominal and Real Interest Rates Positive and Negative Real Interest Rates Real Interest Rates in Various Countries Hyperinflations Fitting Linear Trends Trends in Levels and Logarithms Deviations from Linear and Log-Linear Trends Linear Trends with Constant Growth Annual Real GDP Growth Rates Quarterly GDP Growth Rates Summary Measuring Macroeconomic Variables Introduction Measuring the Price Level and Inflation Calculating the GDP Deflator The Balance of Payments Devaluation and the Balance of Payments Summary Interactions Between Macroeconomic Variables Introduction Comovements with GDP Growth Lead and Lag Comovements Inflation over the Business Cycle Money Supply and Inflation International Comovements Summary National Income Accounting Introduction to National Income Accounting Introduction Defining Output Introduction Potential Pitfalls in Measuring Productive Activity Transfer Payments Double Counting - a Potential Error Double Counting - Avoiding the Problem Summary Developing an Accounting Framework Introduction Developing an Accounting Framework The Household Sector The Productive Sector The Circular Flow of Income Investment and Saving Why Saving Equals Investment The Inclusion of Government Injections Equal Withdrawals The Foreign Sector The Injections Equal Withdrawals (Again) Summary The Measurement of GDP in Practice Introduction Real and Nominal GDP The Output Approach GVA in Current Prices Output by Sector The Expenditure Approach Composition of Expenditure The Income Approach GDP by Income Type Summary GNI, NNI and Economic Welfare Introduction GNI and NNI GDP and Economic Welfare Summary Summary of National Income Accounting Summary Income Expenditure Model Introduction to the Income Expenditure Model Introduction Circular Flow of Income and Expenditure Introduction Basic Concepts: Firms and Households Basic Concepts: Aggregate Markets The Simple Circular Flow of Income and Expenditure The Full Circular Flow of Income and Expenditure Accounting Identities in the Circular Flow Planned Versus Actual Flows Summary The Household Sector Introduction The Consumption Function Consumption and Income in Selected Countries Marginal Propensities to Consume and Save Average Propensity to Consume The Consumption Function Diagram Consumption, Taxation and Saving Taxation Saving Summary The Firms Sector and the Goods Market Introduction Aggregate Demand in the Goods Market Constructing the Aggregate Demand Function The Firms Sector Aggregate Supply: Equation & Diagram Summary Equilibrium in the Goods Market Introduction Goods Market Equilibrium Keynesian Cross Diagram The Formal Model: Equations & Solutions Solution Method 1: Aggregate Demand equals Aggregate Output/Income Introduction to Solution Method Two Solution Method 2: Planned Withdrawals equals Planned Injections Equilibrium Values for Other Variables Formal Model: Diagrams Summary Exogenous Changes in Aggregate Demand Introduction A Change in Injections A Change in Injections: a numerical example The Multiplier The Size of the Multiplier Equilibrium Values and Exogenous Changes The Multiplier: Withdrawals/Injections Summary Policy Implications of the Model Introduction Unemployment and Macroeconomic Policy Equilibrium and Full Employment Policy Implications: A Few Cautions Summary Money Supply and Demand Introduction to Money Introduction Money Supply and Demand: Introduction Functions of Money Summary Money Supply Introduction The Money Stock: Aggregate Measures Flows of Funds Accounts Assets and Liabilities Financial Accounts and the Flows of Funds The Banking System: The Role of the Central Bank The Banking System: The Other Banks Non-Bank Financial Institutions (NBFI's) The Banking System Banking Operations A Multi Bank System Loans and the Banking System The Minimum Reserve Ratio Loan Expansion and the Bank Deposit Multiplier Summary Monetary Control Introduction Control of the Money Supply Exogenous and Endogenous Money Bills and Bonds Open Market Operations: In Theory Open Market Operations: In UK Practice Open Market Sales and Banks' Responses Other Monetary Control Measures Interest Rate Control Methods Summary Classical Theory of Money Demand Introduction Money Supply and Demand: Theoretical Approaches The Classical Quantity Theory of Money The Cambridge Version of Quantity Theory of Money The Classical Loanable Funds Market Summary Keynesian Theory of Demand for Money Introduction Keynesian Theory of Money Demand The Transactions Demand for Money The Speculative Demand for Money The Total Demand for Money Function The Money Market and Equilibrium Interest Rate Exogenous Changes and their Money Market Effects The LM Curve and Equation LM Curve: Graphical Derivation LM Curve and Equation: Exogenous Changes LM Curve: Equation Derivation Summary Monetarist Theory Introduction Friedman's Theory of Money Demand Monetarism - The General Approach Money, Price Level and Output: Debates on Causality Empirical Evidence on the Money Demand Function Summary Summary of Money Supply and Demand Introduction Reconciling Money Flows and Money Stocks Money Supply and Demand: Review Summary Theories of Aggregate Demand Introduction to Aggregate Demand Introduction Theories of Aggregate Demand Classical / Monetarist Aggregate Demand Introduction The Quantity Theory of Money The Quantity Theory and Aggregate Demand The Monetarist Transmission Mechanism Policy Implications Summary Classical / Monetarist Open Economy Introduction International Trade: An Example Fixed Exchange Rates Flexible Exchange Rates Summary: Trade and Exchange Rates Summary Keynesian Aggregate Demand Introduction Introduction: Keynesian Aggregate Demand Consumer Demand and Disposable Income Consumer Demand and the Rate of Interest The Consumption Demand Function The Investment Decision and the Rate of Interest Investment Demand and the Rate of Interest Investment Demand and Aggregate Output/Income The Investment Demand Function The IS Equation and Curve: Graphical Approach Changes in Injections and Withdrawals The IS Equation and Curve: Equation Approach The IS Curve and Aggregate Demand The IS-LM Analysis and Aggregate Demand Real - Financial Sector Interactions Joint Equilibrium of Goods and Money Markets IS-LM Equilibrium Exogenous Changes in the IS-LM Model Relative Effects of Exogenous Changes IS-LM Models Policy Implications of the IS-LM Theory Keynesian Aggregate Demand and the Price Level Summary Keynesian Open Economy Introduction The BP Curve IS-LM-BP Analysis with Fixed Exchange Rates IS-LM-BP Analysis: Exchange Rate Changes IS-LM-BP Analysis with Flexible Exchange Rates Exogenous Changes: Fixed Exchange Rates Exogenous Changes: Flexible Exchange Rates Summary Neoclassical Aggregate Demand Introduction Neoclassical Theory of Consumer Expenditure The Permanent Income Hypothesis The Life Cycle Hypothesis Neoclassical Consumption Theories Real Balance Effects in Aggregate Demand Aggregate Demand as a Function of the Price Level The Neoclassical Synthesis Criticisms of the Neoclassical Synthesis Summary Theories of Aggregate Supply Introduction to Theories of Aggregate Supply Introduction Basic Tools for Aggregate Supply Introduction The Aggregate Production Function The Aggregate Demand for Labour Labour Supply and Unemployment Summary The Classical Theory of Aggregate Supply Introduction Classical Aggregate Supply at a Glance Classical Labour Supply Theory Are You Prone to Money Illusion? Classical Model: Employment Determination The Classical Aggregate Supply Curve AS Curve Shifts: Technology Shocks AS Curve Shifts: Income Tax Changes Unemployment in the Classical Model Classical Aggregate Supply: A Summary Summary Keynesian Theory of Aggregate Supply Introduction Keynesian Aggregate Supply at a Glance Keynesian Theory of Labour Supply Keynesian Model: Employment Determination The Keynesian Aggregate Supply Curve Unemployment in the Keynesian Model Keynesian Aggregate Supply: A Summary Summary The Monetarist Model of Aggregate Supply Introduction Monetarist Aggregate Supply at a Glance Monetarist Theory of Labour Supply Monetarist Model: Employment Determination The Monetarist Aggregate Supply Curve Unemployment in the Monetarist Model Logarithms and Growth Rates: A Review The Phillips Curve Monetarist Aggregate Supply: A Summary Summary Monetary and Fiscal Policies Introduction to Fiscal and Monetary Policy in Closed and Open Economies Introduction Macroeconomic Policy and AggregateDemand Introduction Fiscal Policy and Crowding Out Recap on the Slope of the IS Curve Recap on the Slope of the LM Curve The Effectiveness of Fiscal Policy Fiscal Policy Exercise - Introduction Fiscal Policy Exercise Fiscal Policy Exercise Solutions Monetary Policy The Effectiveness of Monetary Policy Monetary Policy Exercise - Introduction Monetary Policy Exercise Monetary Policy Exercise Solutions Summary Fiscal and Monetary Policy in the AS-AD framework Introduction Keynes Versus the Classics Fiscal Policy Under Flexible Prices Monetary Policy Under Flexible Prices AS-AD Fiscal Policy Exercise - Introduction AS-AD: Fiscal Policy Exercise AS-AD: Fiscal Policy Solutions Summary Policy in the Open Economy Introduction The IS-LM-BP Framework Policy Effectiveness in the Open Economy Fiscal Policy in a Fixed Exchange Rate Regime Monetary Policy in a Fixed Exchange Rate Regime Fiscal Policy Under Flexible Exchange Rates Monetary Policy Under Flexible Exchange Rates Policy Exercise Summary The Monetarist Critique of Active Stabilisation Policy Introduction The Natural Rate Hypothesis Policy Timing and Magnitude The Timing of Policy Changes Timing and Magnitude The Political Angle Summary Monetary and Fiscal Policy in Open and Closed Economies Summary Macroeconomic Fluctuations Macroeconomic Fluctuations: An Introduction Introduction Concepts and Definitions Introduction Measuring a Cycle Cycles Terminology An Actual Cycle Aggregate Demand and Supply Shocks Shocks and Persistence Effects of Shocks and Persistence Summary Macroeconomic Theories of Fluctuations Introduction Theories of Cycles: Overview Classical Model: AD Shock Classical Model: AS Shock Stabilising Prices in the Classical Model Keynesian Model: AD Shock Keynesian Model: AS Shock Monetarist Model: AD Shock Monetarist Model: AD Shocks Monetarist Model: AS Shock Monetarist Model: AS Shocks Summary Introductory Mathematics for Economists Introductory Mathematics for Economists Introduction About Introductory Mathematics for Economists The Basics Introduction Variables and Functions Fractions and Sharing Basic Rules of Algebra Coordinates and Graphs Powers and Indices Economic Problems - Basic Mathematics Summary of the Basics Equations Introduction Transposition Linear Equations Quadratic Equations Simultaneous Equations Exponential Functions Logarithmic Functions Economic Problems - Equations Summary of Equations Sequences and Series Introduction Sequences and Series Present Value & Cash Flow Economic Problems - Sequences Summary - Sequence & Series Summary for Introductory Mathematics for Economists Summary Intermediate Mathematics for Economists Intermediate Mathematics for Economists Introduction About Intermediate Mathematics for Economics Differentiation in Economics Introduction Why Economists use Differentiation The Basic Rules of Differentiation Worked Examples A Summary of The Basic Rules of Differentiation Practice Differentiation Example One - Utility Functions Example Two - Revenue Functions Example Three - Cost Functions Maximum & Minimum Values Introduction Identifying Maximum & Minimum Values Checking for Maximum or Minimum Turning points Rules for Finding a Maximum or Minimum What Happens at a Maximum? Example One - Maximum Profit Example Two - Minimum Average Cost Product, Quotient & Chain Rules Introduction The Product Rule The Quotient Rule The Chain Rule Further Rules of Differentiation - A Summary Example One - Marginal Revenue (Product Rule) Partial Differentiation Introduction Marginal Product of Labour and Capital Practice Partial Differentiation Maxima/Minima of Multivariate Functions Introduction Optimisation of Multivariate Functions Maxima/Minima Subject to a Constraint Introduction Constrained Optimisation The Substitution Method The Lagrange Multiplier Method Differentiation of Log/Exponential Functions Introduction Natural Logarithmic & Exponential Functions Rules for Differentiation of Logs/Exponentials Practise Differentiating Logs/Exponentials Summary for Intermediate Mathematics for Economists Summary Probability for Economists Elementary Probability Introduction Sets Probability: Outcomes, Events & Sample Spaces Definition of Probability: The Probability Postulates Probability Calculator Throwing Two Coins: How Many Heads? Summary Elementary Statistics Introduction Grouped Data The Mean The Mode The Median of Raw Ungrouped Data The Median: Grouped Data Mean, Mode, Median and Symmetry Summary Discrete Distributions Introduction Binomial Distribution Poisson Distribution Summary Continuous Distributions Introduction Normal Distribution Summary Central Limit Theorem Introduction Central Limit Theorem Summary Statistics for Economists Correlation Coefficient Introduction How To Get More Information (in this chapter) Correlation Coefficient Summary Simple Regression Introduction Fitting a Line to the Data Linear Regression (or Fitting a Line to the Data) Linear Regression Summary Multiple Regression Introduction Multiple Linear Regression Multiple Linear Regression Analysis Chi-squared Test for Normality of Residuals F-Test t-test Regression: Analysis of Variance The Analysis of Variance Multiple Regression As A Sequence of Simple Regressions Summary Analysis of Variance Introduction Analysis of Variance Summary Dummy Variables Introduction Dummy Variables Summary Time Series Analysis Introduction Time Series Analysis: Moving Averages Time Series Analysis Summary