Income-elastic, 476
Income-inelastic, 476
Increase in demand, 51
Increase in supply, 61
Increasing opportunity cost, 19
Increasing returns to scale,
562
Independent variable,35–36,
460
Indexing to CPI, 147
India
economic growth, 367–369,
374, 389
monetary neutrality, 318
Indifference curves, 787–790
budget line, slope of,
796–797
consumer choice and,
791–792
marginal rate of substitution,
792–795
preferences, choices and,
799–800
prices, marginal rate of sub-
stitution and, 797–799
properties of, 790–791
tangency condition, 795–796
Individual choice, 2
Individual consumer surplus,
485
Individual demand curve,
55–56
Individual labor supply
curve,696–697
Individual producer surplus,
490
Individual supply curve,
63–64
Industry supply curve, 599
long-run, 601–605
long-run equilibrium, cost
of, 605
short-run, 599–601
IndyMac, 245
Inefficient allocation of sales
among sellers, 84
Inefficient allocation to
consumers, 80
Inefficient, in production, 18
Inefficiently high quality, 85
Inefficiently low consumption,
745
Inefficiently low production,
745
Inefficiently low quality, 81
Inefficiently low quantity, 84
Inelastic,467–472
Inferior good,54, 460, 476
Inflation,12–13, 134 –139
consumer price index,
143 –147
cost-push, 327
demand-pull, 327
disinflation, 139
expected, 333–336
GDP deflator, 146hyperinflation, 136–137,
325–327
inflation tax, 324–325
interest rates, 138–139
Israel, 136–137
level of prices, 134–138
loanable funds, 282–284
long-run Phillips curve,
335–336
measurement, calculation,
143 –147
menu costs, 136–137
monetary policy, 310–313
money, 321–327
nonaccelerating inflation
rate of unemployment,
336–337
output gap, unemployment
rate, 328–329
Portugal, 101, 112
price indexes, 143–147
producer price index, 143,
145 –146
real exchange rate, 423–425
shoe-leather costs, 136–137
short-run Phillips curve,
331–335
stagflation, 193, 334
targeting, 312
unit-of-account costs,
137–138
Venezuela, 116
winners/losers, 138–139
Zimbabwe, 137, 321,
323–324, 326
Inflation rate,135 –139
core, 337
versuslevel of price, 135
United States, 135–139
Inflation targeting, 312
Inflation tax,324–325
Inflationary gap, 196
contractionary fiscal policy,
206
unemployment rate, 328
Inflows, 223. See alsoCapital
inflow
Information, economics of
adverse selection, 782–784
moral hazard, 784–785
private information, 782
Information technology, 379
Infrastructure, 387
In-kind benefit, 768
Input,62–63
alternative combinations,
706–707
cost minimization, 707–709
GDP and, 106–108, 110
Interdependence, 638
Interest rate, 222
CDs, 268–271
equilibrium, 273–274,
277–280
Fisher effect, 283
inflation, 138–139investment spending,
167–168
loanable funds, 277–286
long run determination,
285–286
long-term, 270
monetary policy, Federal
Reserve, 307–313
money, 273 –275
money demand curve,
270 –273
money supply changes,
317–319
opportunity cost, holding
money, 268–270
short run determination,
284–285
short-term, 268–270
U.S. housing boom, 169
Interest rate effect of a
change in the aggre-
gate price level, 174
Interest rate models
comparing, 284–286
liquidity preference,
273–274, 284–286
loanable funds, 277–286
long run determination,
285–286
short run determination,
284–285
Intermediate goods and serv-
ices,106 –107
Internalize the externalities,
728
International business cycle,
438
International capital flows,
415 – 417
International finance. SeeOpen
economy
International Monetary Fund,
351
International trade. See also
Open economy
comparative advantage,
28–29
exports/imports, 105
International transfers,
409–410, 412
Inventories,105 –106,
168 –170
Inventory investment,
168 –170
Investment banks, 257
Investment spending,106,
157–160
capital flows, 413, 415–416
economic growth, 386
fluctuations, 167
Great Depression, 161
interest rate, 167–168
inventories, 168–170
planned, 166–167
production capacity, 168
real GDP, 168savings, 222–224
unplanned, 168–170
Ireland
economic growth, 369
Giffen goods and, 459
infrastructure, 387
Israel, inflation, 136–137
Italy, economic growth, 382
It’s a Wonderful Life, 245J
Jackpots, present value and, 241
Japan
Bank of Japan, 253, 341, 359
consumer price index, 145
deficit, debt, 300, 302–303
economic growth, 365, 385
government spending, tax
revenue, 202
Lost Decade, 340–341
monetary neutrality, 318
natural resources, 378
private savings, 415
public works projects, 177
real GDP per capita growth
rate, 382
Jevons, William Stanley, 391
Job search, 127
Jobs, unemployment, 126–127
Johnson, Lyndon, 205, 209
Joseph, Marc, 157K
Keynes, John Maynard, 199,
317, 322, 343–351
Keynesian economics, 199,
344–351, 355–357
challenges to, 347–351
Great Depression, 344–347
Keynesian Revolution,
344 –347
new, 352, 356
Kidney transplant, consumer
surplus and, 488
Korea, monetary neutrality, 318
Kuwait, natural resources, 378
Kuznets, Simon, 113
Kydland, Finn, 353L
Labor,3, 680
Labor force,12, 119, 131
Labor force participation
rate, 119
Labor market, 103, 128. See also
Labor supply
equilibrium in, 698–704
imperfect competition and,
703–704
perfect competition and,
700–703
product market, perfect com-
petition and, 700
Labor market institutions, 131
Labor productivity,370 –371I-6 INDEX