Contents
The essence of the economy; an overview
Business and the economy
Introducing the rnacroeconomic environment of business
The economic problem
Government and the economy
Government economic objectives
Economic targets and instruments
The structure of this book
Developments in the international economy
International economic performance: an historical
perspective
Drivers of global economic performance
International economic performance in the 1990s
Future challenges for the global economy
Concluding remarks
Understanding economic flows
The essence of economic flows
The measurement of economic activity
THE ESSENCE OF THE ECONOMY
Problems in calculating economic activity
Compilation and uses of national income accounts
A model of national income determination
Concluding remarks
National income determination
The essence of national income determination
Keynesians versus monetarists: an overview
The components of aggregate demand
Consumer spending and savings
Investment expenditure
Government expenditure
Export and import expenditure
Deflationary and inflationary gaps
Measuring the impact of changes in aggregate demand:
the multiplier
The importance of the national income multiplier
The accelerator principle
The business cycle
Concluding remarks
Management of the economy 1: Fiscal policy
The essence of fiscal policy
Problems with fine-tuning aggregate demand
Public finance
Government borrowing
Criticisms of fiscal policy and deficit financing
Concluding remarks
Management of the economy 11: Monetary policy
The essence of monetary policy
Principles of monetarism
Measuring the money supply
Targeting the money supply
Criticisms of monetarism
The effects of monetary policy on business
Concluding remarks
Supply-side economics
The essence of supply-side economics
The principles of supply-side economics
Supply-side economics in practice
Concluding remarks
Notes
International trade
The essence of international trade
The principle of comparative advantage - an argument
for free trade
Further arguments for free trade
Protectionism in international trade
The balance of payments
Management of current account imbalances
Concluding remarks
Exchange rate policy
The essence of exchange rate policy
Exchange rate systems
Exchange rate systems compared
The determination of exchange rates
Exchange rates and the balance of payments
Exchange rates and business
Concluding remarks
Note
Case studies
1 Determination of economic activity
2 The relationship between inflation and unemployment
3 Prospects for European Economic and Monetary Union
4 The international debt crisis
5 Analysis of the US twin deficits
6 Linkages between money, output prices and interest rates
7 Outlook for the economy
Appendix: Sources of economic data for managers
UK sources
Intemational sources
Further reading
Index
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