Britain (continued)
capital flows, 415, 417
congestion charge, 57
loanable funds market, 414
pound, 435, 439
real GDP per capita growth
rate, 382
Brookings Institution, 374
Brooks, Diana, 655
Bryan, William Jennings, 138
Budget balance,223, 296–300
budget deficit, 296–300
cyclically adjusted, 297–299
fiscal policy, 296–297
Budget constraint,514 –515
Budget deficit,223, 296–305
actualversuscyclically
adjusted, 299
government, 280–281
implicit liabilities, 303–304
in practice, 301–303
unemployment rate, 298
Budget line,514 –515
Budget surplus,223, 296–301
Bureau of Economic Analysis,
102
Bureau of Labor Statistics
(BLS), 120, 147, 161
Business cycle,10 –13
aggregate output, 12
classical macroeconomics, 344
cyclically adjusted budget
balance, 297–299
international, 438
long-run economic growth,
400
unemployment, 11–12
Butter, price floors, 82–83C
Cable television, natural
monopoly and, 621
Canada
aircraft exports, 28–29
exchange rate, 426, 431–432
government spending, tax
revenue, 202
monetary neutrality, 318
natural resources, 378
Cap and trade system, 393, 736
Capital, 3
Capital account. SeeFinancial
account
Capital flows
balance of payments,
408–413
financial account, 411–414
golden age, 417
international, determinants,
415 – 417
net, gross, 416
two-way, 416
Capital inflow,223–224
exchange rate, 422–423
loanable funds, 281,
413 – 415Capital requirements, 246
Carbon dioxide emissions,
392–393
Cartel, 639
Cash, 231, 235, 247–248. See
alsoMoney
Causal relationship, 35
CBO (Congressional Budget
Office), 131, 185, 328,
338
CD (certificate of deposit),
268–271
Central bank,253, 310. See
alsoFederal Reserve
Bank of England, 253, 358
Bank of Japan, 253, 341, 359
European Central Bank
(ECB), 253
monetary policy, 315–316,
318
targets, 358
Certificate of deposit (CD),
268–271
Ceteris paribus. SeeOther things
equal assumption
Chained dollars, 115
Chain-linking, 115
Change in demand, 51
Change in supply, 60
Checkable bank deposit,231,
247–248. See alsoBank
deposit
Chile, economic growth, 381
China
carbon dioxide emissions,
392
economic growth, 365, 367,
369, 374, 385
exchange rate, 425, 432
Nike factories, 416
pollution, 390
Chiron Corporation, 457
Cigarette exchange, 14,
232–233
Circular-flow diagram, 102–106
expanded, 103–106
simple, 102–103
Citizens’ Bank of Louisiana,
234
Clam licenses, quantity
controls, 92
Classic model of the price
level,322–323
Classical macroeconomics,
343–344, 355–357
Clayton Antitrust Act of 1914,
755–756
Climate change, economic
growth and, 392–393
Climate protection, cost of, 393
Club of Rome, 389
The Coal Question(Jevons), 391
Coase theorem, 728
Coffee
demand curve, 49–56
market equilibrium, 66–69supply and demand, 47,
71–74
supply curve, 59–64
COLAs (cost-of-living
allowances), 147
Collective bargaining, 129
College tuition, price elasticity
of demand and, 473
Collins, Susan, 374
Collusion,639, 640– 641
Command economy, 2
Commercial banks,257,
264–265
Commodity,182, 569
Commodity money, 233
Commodity prices, SRAS,
182–183
Commodity-backed money,
233
Common resources, 749
efficient use of, 750–751
overuse of, 749–750
Comparative advantage,24 –29
gains from trade, 26
international trade, 28–29
Compensating differentials,
711–712
Competition
antitrust policy, 754–755
Clayton Antitrust Act of
1914, 755–756
Federal Trade Commission
Act of 1914, 756
natural monopoly and,
756–758
promotion of, 754
Sherman Antitrust Act of
1890, 755
Competition among sellers, 669
Competitive market,48,
180 –181
Complements,53, 57
in factor markets, 706–707
in production, 63
Conditional convergence, 282
Congestion charge, 57
Congressional Budget Office
(CBO), 131, 185, 328,
338
Constant opportunity cost, 19
Constant returns to scale, 563
Consumer choice, indifference
curves and, 791–792
budget line, slope of,
796–797
marginal rate of substitution,
792–795
preferences, choices and,
799–800
prices, marginal rate of sub-
stitution and, 797–799
tangency condition, 795–796
Consumer price index (CPI),
143 –147, 337
Consumer spending,103,
161–167aggregate consumption
function, 164–166
autonomous, 162–164
consumption function,
162–164
current disposable income,
161–164
fluctuations, 167
Great Depression, 161
Consumer surplus,482, 485
changes in trade quantity,
498–499
changing prices and,
486–488
equity and efficiency, 499
gains from trade and,
495–496
market efficiency and,
496–499
reallocation of consumption,
496–497
reallocation of sales, 497–498
taxation costs and, 506–507
willingness to pay, and,
483–486
Consumers, demand curve,
55–56
Consumption bundle, 142, 512
Consumption function,
162–164
Consumption possibilities,
514 –515
Contractionary fiscal policy,
204–206, 209
Contractionary monetary
policy,310, 313
Convergence hypothesis,
381–382
Copyright, 572
Core inflation rate, 337
Cost
concept and measures, 564
producer surplus and,
489–492
Cost curves, 548–550
Cost minimization, 707–708
Cost-minimization rule,
708–709
Cost-of-living allowances
(COLAs), 147
Cost-push inflation, 327
Counterfeit money, 221, 234,
265
CPI (consumer price index),
143 –147, 337
Cramer, Jim, 295, 309
Cross-price elasticity of
demand,475 – 476
Crowding out,281, 300
Currency, 231, 235, 243. See
alsoMoney
Currency in circulation, 231
Current account,410 – 413,
436
Current disposable income,
161–164I-2 INDEX