Principles of Macroeconomics 2e covers the scope and sequence of most introductory economics courses. The text includes many current examples, which are handled in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition has been thoroughly revised to increase clarity, update data and current event impacts, and incorporate the feedback from many reviewers and adopters.Changes made in Principles of Macroeconomics 2e are described in the preface and the transition guide to help instructors transition to the second edition.

By the end of this section, you will be able to:Contrast expansionary monetary policy and contractionary monetary policyExplain how monetary policy impacts interest rates and aggregate demandEvaluate Federal Reserve decisions over the last forty yearsExplain the significance of quantitative easing (QE)

By the end of this section, you will be able to:Analyze whether monetary policy decisions should be made more democraticallyCalculate the velocity of moneyEvaluate the central bank’s influence on inflation, unemployment, asset bubbles, and leverage cyclesCalculate the effects of monetary stimulus

By the end of this section, you will be able to:Explain the aggregate supply curve and how it relates to real GDP and potential GDPExplain the aggregate demand curve and how it is influenced by price levelsInterpret the aggregate demand/aggregate supply modelIdentify the point of equilibrium in the aggregate demand/aggregate supply modelDefine short run aggregate supply and long run aggregate supply

In this chapter, you will learn about:Macroeconomic Perspectives on Demand and SupplyBuilding a Model of Aggregate Demand and Aggregate SupplyShifts in Aggregate SupplyShifts in Aggregate DemandHow the AD/AS Model Incorporates Growth, Unemployment, and InflationKeynes’ Law and Say’s Law in the AD/AS Model

By the end of this section, you will be able to:Explain real GDP, recessionary gaps, and inflationary gapsRecognize the Keynesian AD/AS modelIdentify the determining factors of both consumption expenditure and investment expenditureAnalyze the factors that determine government spending and net exports

By the end of this section, you will be able to:Explain the Phillips curve, noting its impact on the theories of Keynesian economicsGraph a Phillips curveIdentify factors that cause the instability of the Phillips curveAnalyze the Keynesian policy for reducing unemployment and inflation

By the end of this section, you will be able to:Explain the importance of potential GDP in the long runAnalyze the role of flexible pricesInterpret a neoclassical model of aggregate demand and aggregate supplyEvaluate different ways for measuring the speed of macroeconomic adjustment