Figures
1.1 Aggregate Demand and Aggregate Supply
2.1 The Circular Flow of Income in a Two Sector Economy
2.2 Withdrawals and Injections in an Economy
2.3 The Circular Flow of Income in a Three Sector Economy
2.4 The Circular Flow of Income in a Four Sector Economy
4.1 The Short-run Aggregate Production Function
4.2 Aggregate Demand Curve for Labour
4.3 Derivation of the Individual’s Supply Curve of Labour
4.4 The Individual’s Supply Curve of Labour
4.5 The Determination of Employment, Real Wage Rate and Output
5.1 The Non-linear Consumption Function
5.2 The Linear Consumption Function
5.4 The Aggregate Demand Function
5.5 Determination of Equilibrium Income or Output in a Two Sector Economy
6.1 Effect of a Change in Investment on the Equilibrium Income or Output
7.1 Determination of Equilibrium Income or Output in a Three Sector Economy
8.1 The Import and Export Functions
8.2 Determination of Equilibrium Income or Output in a Four Sector Economy
9.1 Relationship Between Income and Consumption: The Absolute Income Hypothesis
9.2 Relationship Between Income and Consumption: The Life Cycle Hypothesis
10.1 The Marginal Efficiency of Capital Schedule
10.2 The Aggregate Marginal Efficiency of Capital Schedule
10.3 Determination of the Equilibrium Investment
10.4 Marginal Efficiency of Capital Schedule and Marginal Efficiency of Investment Schedule
10.5 A Fall in the Rate of Interest and Capital Accumulation
10.6 The Shift in the MEC Schedule and Capital Accumulation
13.1 Determination of the Rate of Interest: The Classical Theory
13.2 A Change in Saving and its Effect on the Rate of Interest
13.3 Interest Rate Determination in the Loanable Funds Theory
14.1 Individual’s Money Holdings for Transactions
14.2 Transactions Demand for Money as a Function of the Income Level
14.3 Transactions Demand for Money as Interest Inelastic
14.4 Transactions Demand for Money as Interest Elastic
14.5 Speculative Demand Curve for Money
14.6 The Total Demand for Money
14.7 Determination of the Rate of Interest: The Keynesian Theory
14.8 Effect of Changes in the Money Supply on the Interest Rate
14.9 Effect of Changes in the Transactions Demand for Money on the Interest Rate
15.1 Maximization of Utility by the Individual Wealth Holder
15.2 Effects of a Change in the Interest Rate on the Individual Wealth Holder’s Asset Portfolio
15.5 Effects of an Increase in the Risk on Bonds on the lndividual Wealth Holder’s Asset Portfolio
15.6 The Individual’s Average Money Holdings Over a Year
16.1 The Goods Market Equilibrium in a Two Sector Economy: The IS Curve
16.2 The Money Market Equilibrium in a Two Sector Economy: The LM Curve
16.3 Equilibrium in the Two Markets: The Goods Market and Money Market
16.4 The IS Curve Equation Y = 1400 – 20r
16.5 The LM Curve Equation Y = 1200 + 16r
16.6 Simultaneous Equilibrium for IS and LM Curves When Y = 1200 and r = 10%
16.9 A Simultaneous Shift in Both IS and LM Curves
16.10 IS Curves of Equation Y = 520–8r and Y = 600–8r
16.11 LM Curves of Equation Y = 1200 + 25r and Y = 1500 + 25r
16.12 IS Curves of Equation Y = 720–16r and Y = 720–32r
17.1 The Goods Market Equilibrium in a Three Sector Economy: The IS Curve
17.2 Equilibrium in the Goods and the Money Market in a Three Sector economy
17.3 Simultaneous Equilibrium for IS and LM Curves Exist When Y = 527.5 and r = 2.375%
17.4 Shift in the IS Curve Due to Changes in Fiscal Policy
17.5 Shift in the IS Curve Due to an Increase in Tax
17.6 Shift in the IS Curve Due to a Decrease in Tax
17.7 The Effects of an Increase in the Money Supply
17.9 Effectiveness of Fiscal Policy
17.10 Effectiveness of Monetary Policy
18.1 Derivation of the Aggregate Demand Curve from the IS—LM Model
18.2 Shifts in the Aggregate Demand Curve
18.3 The Classical Approach to the Aggregate Supply Curve
18.4 The Keynesian Approach to the Aggregate Supply Curve
18.5 Derivation of Upward Sloping Aggregate Supply Curve through the Change in Real Wage
18.6 Derivation of Upward Sloping Aggregate Supply Curve through the Production Function
18.7 Determination of the Output Level and the Price Level
18.8 Effects of a Monetary Expansion
18.9 Effects of a Decrease in Government Budget Deficit
18.10 Effects of a Shift in Aggregate Supply: Supply Shocks
18.11 Adverse Supply Shock and Accommodating Monetary or Fiscal Policies
20.2 Demand Pull Inflation Arising from Real Factors
20.3 Demand Pull Inflation Arising from Monetary Factors
20.4 Cost Push Inflation Arising from an Autonomous Increase in the Wage Rate
20.5 Relationship Between Demand Side Inflation and Supply Side Inflation
20.6 Supply Side Inflation and Restrictive Monetary and Fiscal Policies
21.3 Phillips’ Curve for the United Kingdom
21.5 Modern Phillips’ Curve: Short-run
21.6 Modern Phillips’ Curve: Long-run
22.1 Demand for Foreign Exchange
22.2 Supply of Foreign Exchange
22.3 Determination of the Equilibrium Exchange Rate under a Flexible Exchange Rate System
22.4 An Effect of a Change in Demand on the Equilibrium Exchange Rate
22.5 Determination of the Exchange Rate under a Fixed Exchange Rate System
23.1 Policy Mix and a Simultaneous External and Internal Balance
25.2 Effects of Expansionary Fiscal Policy
25.3 A Fiscal Expansion and Monetary Accommodation
A.2 A Derivation of the IS Curve
A.3 A Derivation of the LM Curve
A.4 The Goods and Money Markets
B.1 The Goods Market Equilibrium in a Four Sector Economy: The IS Curve
B.2 Equilibrium in the Goods and the Money Market in a Four Sector Economy
B.3 Shifts in the IS Curve in a Four Sector Economy