macroeconomics assignment 1

Scarcity means human wants for goods and services exceed the available supply. Supply is limited because resources are limited. Demand, however, is virtually unlimited. Whatever the supply, it seems human nature to want more.

100 people / 10 people per ham = a maximum of 10 hams per month if all residents produce ham. Since consumption is limited by production, the maximum number of hams residents could consume per month is 10.

She is very productive at her consulting job, but not very productive growing vegetables. Time spent consulting would produce far more income than it what she could save growing her vegetables using the same amount of time. So on purely economic grounds, it makes more sense for her to maximize her income by applying her labor to what she does best (i.e. specialization of labor).

The engineer is better at computer science than at painting. Thus, his time is better spent working for pay at his job and paying a painter to paint his house. Of course, this assumes he does not paint his house for fun!

There are many physical systems that would work, for example, the study of planets (micro) in the solar system (macro), or solar systems (micro) in the galaxy (macro).

Draw a box outside the original circular flow to represent the foreign country. Draw an arrow from the foreign country to firms, to represents imports. Draw an arrow in the reverse direction representing payments for imports. Draw an arrow from firms to the foreign country to represent exports. Draw an arrow in the reverse direction to represent payments for imports.

There are many such problems. Consider the AIDS epidemic. Why are so few AIDS patients in Africa and Southeast Asia treated with the same drugs that are effective in the United States and Europe? It is because neither those patients nor the countries in which they live have the resources to purchase the same drugs.

Public enterprise means the factors of production (resources and businesses) are owned and operated by the government.

The United States is a large country economically speaking, so it has less need to trade internationally than the other countries mentioned. (This is the same reason that France and Italy have lower ratios than Belgium or Sweden.) One additional reason is that each of the other countries is a member of the European Union, where trade between members occurs without barriers to trade, like tariffs and quotas.

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• Authors: Steven A. Greenlaw, David Shapiro
• Publisher/website: OpenStax
• Book title: Principles of Macroeconomics 2e
• Publication date: Oct 11, 2017
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-macroeconomics-2e/pages/1-introduction
• Section URL: https://openstax.org/books/principles-macroeconomics-2e/pages/chapter-1

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Principles of Macroeconomics

(3 reviews)

Copyright Year: 2016

ISBN 13: 9781946135179

Publisher: University of Minnesota Libraries Publishing

Language: English

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Reviewed by Faunce Elizabeth, Adjunct Professor, Radford University on 1/10/23

This text appropriately addresses all required areas of macroeconomic topics and provides a clear table of contents/index; however, no glossary is provided. read more

Comprehensiveness rating: 5 see less

This text appropriately addresses all required areas of macroeconomic topics and provides a clear table of contents/index; however, no glossary is provided.

Content Accuracy rating: 5

The textbook is accurate and appears to be free of errors.

Relevance/Longevity rating: 3

This text was published in 2016, and while the content is accurate, it is not current. For example, Chapter 11, Monetary Policy & The Fed, discusses the challenges The Fed faced in 2008. Given the financial impact of Covid and the current inflationary period, the recent actions of The Fed's (2022) should be addressed. Supplemental material would be needed to accompany the use of this text.

Clarity rating: 5

The text appropriately utilizes jargon and terminology needed in a fundamental macroeconomics course. Additionally, the author presents the content as if he/she was speaking directly to a class, which I believe provides clarity to the reader.

Consistency rating: 5

The text is consistent with regards to the structure of the chapters, terminology, and resources (key takeaways, "try it!", etc).

Modularity rating: 5

The textbook is appropriately divided into chapters that can then be easily broken into smaller reading sections. The instructor could easily select the chapters most relevant for their class and then break the chapter up into several class lectures or reading assignments.

Organization/Structure/Flow rating: 4

The organization of the text is probably the one area that I would change. For example, I would present chapter 16 (inflation and employment) after chapter 8 (economic growth) and I would present chapter 12 (fiscal policy) before addressing chapter 9, 10 and 11 (money creation and monetary policy).

Interface rating: 5

This book is very easy to access, with multiple options provided. Additionally, the hyperlinks to the figures, located within each chapter, were very helpful.

Grammatical Errors rating: 5

The text is generally very well written and I found no significant grammatical errors.

Cultural Relevance rating: 5

The text is in no way culturally insensitive and I found most examples and visuals generic in nature.

Reviewed by Brad Humphreys, Professor of Economics, West Virginia University on 9/12/18

The textbook covers all the topics that would typically be covered in a one semester principles of macro course. Measurement of production, employment, prices, interest rates. Short run (cycles) and long run (growth). Theoretical perspectives... read more

The textbook covers all the topics that would typically be covered in a one semester principles of macro course. Measurement of production, employment, prices, interest rates. Short run (cycles) and long run (growth). Theoretical perspectives from the Keynesian and classical perspectives. International topics (trade, globalization). The index looks reasonable.

It appears accurate to me. I teach principles of macro every semester so I am familiar with the basic content. I have not used it in a class yet, so I have not been through this book in detail.

Relevance/Longevity rating: 4

The information is up to date as of 2015. The GDP estimates are from 2014/15 as are the inflation and unemployment estimates. I assume that this will be periodically updated. Not much has changed in principles of macro recently, so keeping this text current will not be much of an issue (until the next recession occurs).

Clarity rating: 4

This is based on Tim Taylors book (they bought the rights) so the original text was written by a respected economist. It is clearly written and undergrads should find this engaging and accessible. The jargon is minimal.

The terminology and framework are completely standard for a principles of macro text. Again, I have taught principles of macro every semester for the last 3-4 years, and the terminology and framework here are what would be expected.

Modularity rating: 4

No long blocks of text. Frequent and clear subheadings. If anything, the chapters appear to be quite short. Some of the chapters appear to be approximately one 75 minute lecture of material.

Very typical organization for a principles of macro text. I have used several (two in the last 3 years - John Taylor and Coppock and Mateer), and they all have the same basic organization.

The graphs, figures, photos and tables all looked good to me. Readable. Clear.

I did not see any grammatical errors. I did not read every chapter, but I'm sure Tim Taylor's book was thoroughly edited when it was being published by a for-profit publishing house.

Examples are drawn fro all over the world, and the photos are inclusive. I did not see any culturally insensitive passages.

Ancillary Material / / The test bank is relatively small. Each chapter has about 35-40 multiple choice questions. This probably not enough for use in a large enrollment section - most test banks from for-profit publishers contain at least 100 multiple choice questions per chapter. The multiple questions all look fine to me. There are some essay questions but I teach large (300+) sections that only use multiple choice questions. / / The provided PowerPoint slides are rudimentary. They basically contain some of the figures, photos, and tables from the text. It will take some time and effort for instructors to develop complete PowerPoint slides for this book.

Reviewed by Darcy Hartman, Senior Lecturer, The Ohio State University on 6/10/15

Having spent a bit of time working my way through other textbooks to arrive at one that seemed to fit my style of teaching, I am pleasantly surprised at the comprehensiveness of this text. It covers all the main principles that would typically be... read more

Having spent a bit of time working my way through other textbooks to arrive at one that seemed to fit my style of teaching, I am pleasantly surprised at the comprehensiveness of this text. It covers all the main principles that would typically be covered, but also includes some chapters on subjects that would be great to implement given enough time. At the very least, they are a resource for students that have taken a greater interest in the course work. I am speaking specifically on the chapters toward the end relating to poverty and income inquality. Additionally, the book contains a good review of graphing and some of the mathematics utilized within the book.

Content Accuracy rating: 4

I will not suggest that I am providing a thorough review in accuracy, but from what I have reviewed, nothing seemed remiss. Perhaps a typo here or there - not enough to interrupt the flow of the material. But everything seemed in order from a content perspective.

The ability to update material would be the part most concerning to me as I do not know the updating practices for the authors. There seems to be good coverage of more recent events, and certainly there is good coverage going further back. I do not take issue with it as it stands. Even with the more expensive textbooks, it is the obligation of the professor or lecturer to keep students current while applying the principles being taught.

I think that what I appreciate most with the textbook is that it seems to be written in a very straightforward manner. One common complaint that I hear from students is that textbook explanations can be tedious to get through. Given all the examples that are provided, and all the sample problems utilized, in addition to the actual writing, I think that students, including international students, would find this a generally approachable source.

Consistency rating: 4

Again, with the caveat that I have not read through every single part of the book, in my examination of the text, I did not enounter any inconsistencies within the book. Also, I felt that the presentation seemed consistent, yet more comprehensive, than most textbooks I have utilized.

The breakdown of the text makes it very approachable from a learner standpoint. It is clear what the objectives are within each small section, and the objectives never seem overwhelming. This is useful from a teaching standpoint to keep students from feeling overwhelmed.

Organization/Structure/Flow rating: 3

The organization of the book does not align with the current way that I teach. While I am open to making adjustments, I do think that the order of some chapters could be rearranged. For example, the topic of economic growth could easily be combined with development rather than treated as an afterthought. With an increasing focus on internationalization in higher education, separating the two suggests a sense of other from my perspective. I find it confusing to have GDP included in the chapter on inflation and unemployment, but then treated separately afterward.

Interface rating: 4

There were a few distractions for me in the layout that seemed to be issues with how it displayed on my computer. These were not so serious that they would prevent me from utilizing the materials. I have not had the chance to see how it presents on an ipad, tablet or phone.

Grammatical Errors rating: 4

I spotted one or two errors, but not enough to deter me from using the book.

Cultural Relevance rating: 4

I certainly did not encounter anything that seemed culturally insensitive or offensive. I would encourage greater use of international examples, particularly when looking at policy tools. The book is U.S. focused; although this is the case with virtually every textbook that is presented to me. Internationalization of the curriculum seems to be an increasingly popular theme. That said, the book certainly utilizes enough international examples for me to consider it.

I am pleasantly surprised by this book. As I prepare for the 2015-2016 academic year, I will certainly consider using this text. I would need to get a better idea of how easily one can access the specific materials needed on demand.

Table of Contents

• Chapter 1: Economics: The Study of Choice
• Chapter 2: Confronting Scarcity: Choices in Production
• Chapter 3: Demand and Supply
• Chapter 4: Applications of Demand and Supply
• Chapter 5: Macroeconomics: The Big Picture
• Chapter 6: Measuring Total Output and Income
• Chapter 7: Aggregate Demand and Aggregate Supply
• Chapter 8: Economic Growth
• Chapter 9: The Nature and Creation of Money
• Chapter 10: Financial Markets and the Economy
• Chapter 11: Monetary Policy and the Fed
• Chapter 12: Government and Fiscal Policy
• Chapter 13: Consumption and the Aggregate Expenditures Model
• Chapter 14: Investment and Economic Activity
• Chapter 15: Net Exports and International Finance
• Chapter 16: Inflation and Unemployment
• Chapter 17: A Brief History of Macroeconomic Thought and Policy
• Chapter 18: Inequality, Poverty, and Discrimination
• Chapter 19: Economic Development
• Chapter 20: Socialist Economies in Transition

Ancillary Material

About the book.

Recognizing that a course in economics may seem daunting to some students, we have tried to make the writing clear and engaging. Clarity comes in part from the intuitive presentation style, but we have also integrated a number of pedagogical features that we believe make learning economic concepts and principles easier and more fun. These features are very student-focused. The chapters themselves are written using a “modular” format. In particular, chapters generally consist of three main content sections that break down a particular topic into manageable parts. Each content section contains not only an exposition of the material at hand but also learning objectives, summaries, examples, and problems. Each chapter is introduced with a story to motivate the material and each chapter ends with a wrap-up and additional problems. Our goal is to encourage active learning by including many examples and many problems of different types.

A tour of the features available for each chapter may give a better sense of what we mean:

Start Up—Chapter introductions set the stage for each chapter with an example that we hope will motivate readers to study the material that follows. These essays, on topics such as the value of a college degree in the labor market or how policy makers reacted to a particular economic recession, lend themselves to the type of analysis explained in the chapter. We often refer to these examples later in the text to demonstrate the link between theory and reality.

Learning Objectives—These succinct statements are guides to the content of each section. Instructors can use them as a snapshot of the important points of the section. After completing the section, students can return to the learning objectives to check if they have mastered the material. Heads Up!—These notes throughout the text warn of common errors and explain how to avoid making them. After our combined teaching experience of more than fifty years, we have seen the same mistakes made by many students. This feature provides additional clarification and shows students how to navigate possibly treacherous waters.

Key Takeaways—These statements review the main points covered in each content section.

Key Terms—Defined within the text, students can review them in context, a process that enhances learning.

Try It! questions—These problems, which appear at the end of each content section and which are answered completely in the text, give students the opportunity to be active learners. They are designed to give students a clear signal as to whether they understand the material before they go on to the next topic.

Cases in Point—These essays included at the end of each content section illustrate the influence of economic forces on real issues and real people. Unlike other texts that use boxed features to present interesting new material or newspaper articles, we have written each case ourselves to integrate them more clearly with the rest of the text.

Summary—In a few paragraphs, the information presented in the chapter is pulled together in a way that allows for a quick review of the material. End-of-chapter concept and numerical problems—These are bountiful and are intended to check understanding, to promote discussion of the issues raised in the chapter, and to engage students in critical thinking about the material. Included are not only general review questions to test basic understanding but also examples drawn from the news and from results of economics research. Some have students working with real-world data.

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Note that the Data Project Assignment is split into two parts and spans both module 6 and module 7. The Module 16 assignment presents two options, one that emphasizes topics from macroeconomics, and the other that emphasizes concepts from microeconomics.

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• Prof. Jonathan Gruber

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• Microeconomics

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