Macroeconomics

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I N D E X

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of Big Macs, 147–149, 148t

current, future money and, 98–100,

99f

of factors of production, 49–50, 50f, 56

falling, money hypothesis and,

329–331

flexible versus sticky, 12–13

law of one price and, 145–146

rental, of capital, 54

sticky, 266t, 266–268, 267t

Price levels, 89

changing, Mundell-Fleming model

with, 366–369, 367f, 368f

current and future money and,

116–118

GDP deflator and, 25

increase in. See Deflation;

Hyperinflation; Inflation

Price shocks, 280

Principles of Economics (Samuelson), 14

Principles of Political Economy and

Taxation (Ricardo), 484

Prisoner of war camps, money in, 82

Private saving, 67

Product (arithmetic), percentage change

of, 26

Production capacity, standard of living

and, 568

Production efficiency, factor accumula-

tion versus, 227–228

Production firms, 527

Production function, 48, 52, 52f

Cobb-Douglas, 57–59, 59f, 527–528

price level and, 89

supply of goods and, 193, 194f

Production smoothing, 543

Productivity. See Labor productivity

Profit

accounting, 55

definition of, 51

economic, 55, 56

Protectionist trade policies, effects of,

142f, 142–143

Public, view of inflation, 101

Public policy, frictional unemployment

and, 167–168

Public saving, 46

Purchasing power parity, 146f, 146–147

Quality, changes in CPI and, 35

Quantity equation, 86–92

as aggregate demand, 269, 270f

definition of, 87

money demand function and, 88–89

transactions and, 86–87

Quantity theory of money, 86–92

Radford, R. A., 82n

Raff, Daniel M. G., 175n

Random variables, 411

Random walk, 517, 536

Random-walk hypothesis, 516–518

implications of, 517–518

Ratio(s), percentage change of, 26

Rational expectations, disinflation and,

396–398

Reagan, Ronald, 4, 133

government debt under, 470

Real-business-cycle theory, 253

Real cost of capital, 530

Real exchange rates

determinants of, 138–139, 139f

trade balance and, 137, 138f

Real GDP, 4–5

business cycle and, 258–259, 259f, 260f

chain-weighted measures of, 25–27

economic fluctuations and. See

Economic fluctuations

nominal GDP versus, 23–24

in United States, 5, 5f, 191

Real interest rates, 63, 63f

in AD-AS model, 411–412

consumption and, 506–507, 507f

definition of, 94

ex ante, 96–97

ex post, 97

Fisher effect and, 94–95

inventory investment and, 543–544

Real money balances, 88

Real rental price of capital, 54

Real variables, 112

Real wages, 53

inflation and, 105–106

labor productivity and, 59–60, 60t

Recessions, 4, 5, 6

of 1970s, 392

of 1982, 257

of 1990s, 393

of 2001, 319–320, 393

of 2007, 257, 297–298

of 2008-2009, 69, 332–334, 393,

474–475, 538, 541

wages and, 400

Red Cross, 82

Reis, Ricardo, 384n

Rent(s), imputations and, 23

Rental firms, 527

Repetto, Andrea, 520n

Republic of Congo, investment rate in,

202f

Research and development, microeco-

nomics of, 241–242

Reserve(s), 548

excess, 553

Reserve Bank of New Zealand Act of

1989, 458

Reserve-deposit ratio, 549, 551

Reserve requirements, 552

Residential investment, 525, 526f,

539–541

changes in housing demand and,

540–541, 541f, 542f

stock equilibrium and flow supply

and, 539–540, 540f