宏經(jīng)名詞解釋Macroeconomics：Thestudyoftheeconomyasawhole.宏觀經(jīng)濟(jì)學(xué)：把經(jīng)濟(jì)視為一個(gè)整體而進(jìn)行的研究。Grossdomesticproduct(GDP)：Thetotalincomeearneddomestically,includingtheincomeearnedbyforeign-ownedfactorsofproduction;thetotalexpenditureondomesticallyproducedgoodsandservices.國內(nèi)生產(chǎn)總值：國內(nèi)所獲得的總收入，包括在國外使用的生產(chǎn)要素帶來的收入；對(duì)一國產(chǎn)品與服務(wù)產(chǎn)出的總支出。Valueadded：Thevalueofafirm’soutputminusthevalueoftheintermediategoodsthefirmpurchased.增加值：企業(yè)產(chǎn)出的價(jià)值減去企業(yè)購買的中間產(chǎn)品的價(jià)值。RealGDP：Thevalueofgoodsandservicesmeasuredusingaconstantsetofprices.實(shí)際GDP：用一組不變價(jià)格衡量的產(chǎn)品與服務(wù)的價(jià)值。GDPdeflator：TheratioofnominalGDPtorealGDP;ameasureoftheoveralllevelofpricesthatshowsthecostofthecurrentlyproducedbasketofgoodsrelativetothecostofthatbasketinabaseyear.GDP平減指數(shù)：名義GDP與實(shí)際GDP比率；衡量總體價(jià)格水平的指標(biāo)，表現(xiàn)現(xiàn)期生產(chǎn)的一籃子物品的成本相對(duì)于基年生產(chǎn)的同一籃子物品的成本的值。Consumerpriceindex(CPI)：Ameasureoftheoveralllevelofpricesthatshowsthecostofafixedbasketofconsumergoodsrelativetothecostofthesamebasketinabaseyear.消費(fèi)者價(jià)格指數(shù)：價(jià)格總體水平的一種衡量指標(biāo)，它表示固定的一籃子消費(fèi)者商品的成本相對(duì)于同樣一籃子消費(fèi)者商品在基年的成本的值。Unemploymentrate：Thepercentageofthoseinthelaborforcewhodonothavejobs.失業(yè)率：勞動(dòng)力中沒有工作的人所占的百分比。Labor-forceparticipationrate：Thepercentageoftheadultpopulationinthelaborforce.勞動(dòng)力參與率：成年人口中勞動(dòng)力的百分比。Disposableincome：Incomeremainingafterthepaymentoftaxes.可支配收入：稅后收入。Marginalpropensitytoconsume(MPC)：Theincreaseinconsumptionresultingfromaone-dollarincreaseindisposableincome.邊際消費(fèi)傾向：可支配收入增加1美元時(shí)所引起的消費(fèi)增加。Realinterestrate：Thereturntosavingandthecostofborrowingafteradjustmentforinflation.實(shí)際利率：根據(jù)通貨膨脹調(diào)整之后的儲(chǔ)蓄收益和借貸成本。Inflation：Anincreaseintheoveralllevelofprices.通貨膨脹：價(jià)格總體水平的上升。Hyperinflation：Extremelyhighinflation.惡性通貨膨脹：極高的通貨膨脹。Money:Thestockofassetsusedfortransactions.貨幣：用于交易的資產(chǎn)存量。Fiatmoney:Moneythatisnotintrinsicallyusefulandisvaluedonlybecauseitisusedasmoney.法定貨幣：本質(zhì)上無用而是由于用作貨幣才有價(jià)值的貨幣。Commoditymoney:Moneythatisintrinsicallyusefulandwouldbevaluedevenifitdidnotserveasmoney.商品貨幣：本質(zhì)上有用的貨幣，即使不作為貨幣也會(huì)受珍視的物品。Moneysupply:Thequantityofmoneyavailableinaneconomy.貨幣供給：一個(gè)經(jīng)濟(jì)中可以得到的貨幣量。Quantityequation:Theidentitystatingthattheproductofthemoneysupplyandthevelocityofmoneyequalsnominalexpenditure(MV=PY);coupledwiththeassumptionofstablevelocity,anexplanationofnominalexpenditurecalledthequantitytheoryofmoney.數(shù)量方程：表示貨幣供給與貨幣流通速度的乘積等于名義支出的恒等式（MV=PY）；加上穩(wěn)定的貨幣流通速度的假設(shè)，這一方程對(duì)名義支出的解釋稱為貨幣數(shù)量論。Incomevelocityofmoney:Thenumberoftimesadollarbillenterssomeone’sincomeinagivenperiodoftime.貨幣的收入流通速度：在一個(gè)給定時(shí)期一張美元鈔票進(jìn)入某個(gè)人收入的次數(shù)。Realmoneybalances:Thequantityofmoneyexpressedintermsofthequantityofgoodsandservicesitcanbuy;thequantityofmoneydividedbythepricelevel(M/P).實(shí)際貨幣余額：用能購買的產(chǎn)品與服務(wù)的數(shù)量來表示的貨幣量；貨幣量除以價(jià)格水平（M/P）。Seigniorage:Therevenueraisedbythegovernmentthroughthecreationofmoney;alsocalledtheinflationtax.貨幣鑄造稅：政府通過創(chuàng)造貨幣而籌集到的收入；又稱“通貨膨脹稅”。Fishereffect:Theone-for-oneinfluenceofexpectedinflationonthenominalinterestrate.費(fèi)雪效應(yīng)：預(yù)期通貨膨脹對(duì)名義利率一對(duì)一的影響。Fisherequation:Theequationstatingthatthenominalinterestrateisthesumoftherealinterestrateandexpectedinflation(i=r+Eπ).費(fèi)雪方程：這一方程規(guī)定，名義利率是實(shí)際利率與預(yù)期通貨膨脹率之和(i=r+Eπ).Shoeleathercost:Thecostofinflationfromreducingrealmoneybalances,suchastheinconvenienceofneedingtomakemorefrequenttripstothebank.鞋底成本：減少實(shí)際貨幣余額引起的通貨膨脹成本，例如，需要更頻繁地光顧銀行帶來的不方便。Menucost:Thecostofchangingaprice.菜單成本：價(jià)格調(diào)整的成本。Classicaldichotomy:Thetheoreticalseparationofrealandnominalvariablesintheclassicalmodel,whichimpliesthatnominalvariablesdonotinfluencerealvariables.(Cf.neutralityofmoney.)古典二分法：古典模型中名義變量與實(shí)際變量在理論上的分離，它意味著名義變量不影響實(shí)際變量。Monetaryneutrality:Thepropertythatachangeinthemoneysupplydoesnotinfluencerealvariables.貨幣中性：貨幣供給變動(dòng)不影響實(shí)際變量的性質(zhì)。Naturalrateofunemployment:Thesteady-staterateofunemployment;therateofunemploymenttowardwhichtheeconomygravitatesinthelongrun.自然失業(yè)率：穩(wěn)定狀態(tài)的失業(yè)率；經(jīng)濟(jì)在長期中趨近的失業(yè)率。Frictionalunemployment:Theunemploymentthatresultsbecauseittakestimeforworkerstosearchforthejobsthatbestsuittheirskillsandtastes.摩擦性失業(yè)：因工人尋找最適于自己技能和偏好的工作需要時(shí)間而引起的失業(yè)。Wagerigidity:Thefailureofwagestoadjusttoequilibratelaborsupplyandlabordemand.工資剛性：工資不能調(diào)整到使勞動(dòng)供給與勞動(dòng)需求達(dá)到均衡。Structuralunemployment:Theunemploymentresultingfromwagerigidityandjobrationing.結(jié)構(gòu)性失業(yè);工資剛性和工作崗位配給所造成的失業(yè)。Efficiencywages:Wagethatafirmwillpaytoanemployeeasanincentivenottoshirk.效率工資：公司付給員工較高的工資，以激勵(lì)其不偷懶。Steadystate:Aconditioninwhichkeyvariablesarenotchanging.穩(wěn)定狀態(tài)：關(guān)鍵變量不變的狀態(tài)。GoldenRulelevelofcapital:Thesteady-statevalueofcapitalthatmaximizesconsumption.資本的黃金率水平:使消費(fèi)最大化的穩(wěn)定狀態(tài)的的人均資本值。Endogenousgrowththeory:Modelsofeconomicgrowththattrytoexplaintherateoftechnologicalchange.內(nèi)生增長理論：試圖解釋技術(shù)變動(dòng)率的經(jīng)濟(jì)增長模型。Okun’slaw:ThenegativerelationshipbetweenunemploymentandrealGDP,accordingtowhichadecreaseinunemploymentof1percentagepointisassociatedwithadditionalgrowthinrealGDPofapproximately2percent.奧肯定律：失業(yè)與實(shí)際GDP之間的負(fù)相關(guān)關(guān)系。根據(jù)奧肯定律，失業(yè)每減少1%與實(shí)際GDP增長提高約2%相聯(lián)系。Aggregatedemand:Therelationshipbetweenthequantityofoutputdemandedandtheaggregatepricelevel.總需求：產(chǎn)出需求量與價(jià)格總體水平之間的關(guān)系。Aggregatesupply:Therelationshipbetweenthequantityofgoodsandservicessuppliedandthepricelevel.總供給：產(chǎn)品與服務(wù)的供給量和價(jià)格水平之間的關(guān)系。Demandshocks:Exogenouseventsthatshifttheaggregatedemandcurve.需求沖擊：使總需求曲線移動(dòng)的外生事件。Supplyshocks:Exogenouseventsthatshifttheaggregatesupplycurve.供給沖擊：使總供給曲線移動(dòng)的外生事件。Stabilizationpolicy:Publicpolicyaimedatreducingtheseverityofshort-runeconomicfluctuations.穩(wěn)定化政策：旨在減少短期經(jīng)濟(jì)波動(dòng)嚴(yán)重性的公共政策。IScurve:Thenegativerelationshipbetweentheinterestrateandthelevelofincomethatarisesinthemarketforgoodsandservices.IS曲線：產(chǎn)品與服務(wù)市場中的利率與收入水平之間的負(fù)相關(guān)關(guān)系。LMcurve:Thepositiverelationshipbetweentheinterestrateandthelevelofincome(whileholdingthepricelevelfixed)thatarisesinthemarketforrealmoneybalances.LM曲線：（在保持價(jià)格水平不變的情況下）實(shí)際貨幣余額市場中的利率與收入水平之間的正相關(guān)關(guān)系。Keynesiancross:Asimplemodelofincomedetermination,basedontheideasinKeynes’sGeneralTheory,whichshowshowchangesinspendingcanhaveamultipliedeffectonaggregateincome.凱恩斯交叉：一個(gè)基于凱恩斯《通論》中思想的簡單的收入決定模型，它表明支出的變動(dòng)如何對(duì)總收入產(chǎn)生乘數(shù)效應(yīng)。Phillipscurve:Anegativerelationshipbetweeninflationandunemployment;initsmodernform,arelationshipamonginflation,cyclicalunemployment,expectedinflation,andsupplyshocks,derivedfromtheshort-runaggregatesupplycurve.菲利普斯曲線：通貨膨脹與失業(yè)之間的負(fù)相關(guān)關(guān)系；它的現(xiàn)代形式是從短期總供給曲線中推導(dǎo)出的通貨膨脹、周期性失業(yè)、預(yù)期的通貨膨脹以及供給沖擊之間的關(guān)系。Adaptiveexpectations:Anapproachthatassumesthatpeopleformtheirexpectationofavariablebasedonrecentlyobservedvaluesofthevariable.適應(yīng)性預(yù)期：假設(shè)人們基于近期觀察到的變量值形成自己對(duì)該變量的預(yù)期的一種方法。Demand-pullinflation:Inflationresultingfromshockstoaggregatedemand.需求拉動(dòng)型通貨膨脹：總需求沖擊引起的通貨膨脹。Cost-pushinflation:Inflationresultingfromshockstoaggregatesupply.成本推動(dòng)型通貨膨脹：產(chǎn)生于總供給沖擊的通貨膨脹。Sacrificeratio:Thenumberofpercentagepointsofayear’srealGDPthatmustbeforgonetoreduceinflationby1percentagepoint.Rationalexpectations犧牲率：為了使通貨膨脹降低一個(gè)百分點(diǎn)而必須放棄的一年實(shí)際GDP的百分點(diǎn)數(shù)。Rationalexpectation：Anapproachthatassumesthatpeopleoptimallyuseallavailableinformation—includinginformationaboutcurrentandprospectivepolicies—toforecastthefuture.理性預(yù)期：假設(shè)人們最優(yōu)地利用所有可獲得的信息——包括關(guān)于現(xiàn)在與未來政策的信息——來預(yù)測(cè)未來的一種方法。Natural-ratehypothesis:Thepremisethatfluctuationsinaggregatedemandinfluenceoutput,employment,andunemploymentonlyintheshortrun,andthatinthelongrunthesevariablesreturntothelevelsimpliedbytheclassicalmodel.自然率假說：總需求的波動(dòng)只在短期中影響產(chǎn)出、就業(yè)與失業(yè)，而在長期中這些變量會(huì)回到古典模型所隱含的水平的一種前提。Hysteresis:Thelong-lastinginfluenceofhistory,suchasonthenaturalrateofunemployment.滯后作用：歷史對(duì)諸如自然失業(yè)率等的持續(xù)長時(shí)間的影響。宏經(jīng)選詞填空題Chapter11.Macroeconomicsisthestudyoftheeconomyasawhole,includinggrowthinincomes,changesinprices,andtherateofunemployment.Macroeconomistsattemptbothtoexplaineconomiceventsandtodevisepoliciestoimproveeconomicperformance.2.Tounderstandtheeconomy,economistsusemodels—theoriesthatsimplifyrealityinordertorevealhowexogenousvariablesinfluenceendogenousvariables.Theartinthescienceofeconomicsisinjudgingwhetheramodelcapturestheimportanteconomicrelationshipsforthematterathand.Becausenosinglemodelcananswerallquestions,macroeconomistsusedifferentmodelstolookatdifferentissues.3.Akeyfeatureofamacroeconomicmodeliswhetheritassumesthatpricesareflexibleorsticky.Accordingtomostmacroeconomists,modelswithflexiblepricesdescribetheeconomyinthelongrun,whereasmodelswithstickypricesofferabetterdescriptionoftheeconomyintheshortrun.4.Microeconomicsisthestudyofhowfirmsandindividualsmakedecisionsandhowthesedecisionmakersinteract.Becausemacroeconomiceventsarisefrommanymicroeconomicinteractions,allmacroeconomicmodelsmustbeconsistentwithmicroeconomicfoundations,evenifthosefoundationsareonlyimplicit.Chapter21.Grossdomesticproduct(GDP)measurestheincomeofeveryoneintheeconomyand,equivalently,thetotalexpenditureontheeconomy’soutputofgoodsandservices.2.NominalGDPvaluesgoodsandservicesatcurrentprices.RealGDPvaluesgoodsandservicesatconstantprices.RealGDPrisesonlywhentheamountofgoodsandserviceshasincreased,whereasnominalGDPcanriseeitherbecauseoutputhasincreasedorbecausepriceshaveincreased.3.GDPisthesumoffourcategoriesofexpenditure:consumption,investment,governmentpurchases,andnetexports.4.Theconsumerpriceindex(CPI)measuresthepriceofafixedbasketofgoodsandservicespurchasedbyatypicalconsumer.LiketheGDPdeflator,whichistheratioofnominalGDPtorealGDP,theCPImeasurestheoveralllevelofprices.5.Thelabor-forceparticipationrateshowsthefractionofadultswhoareworkingorwanttowork.Theunemploymentrateshowswhatfractionofthosewhowouldliketoworkdonothaveajob.Chapter31.Thefactorsofproductionandtheproductiontechnologydeterminetheeconomy’soutputofgoodsandservices.Anincreaseinoneofthefactorsofproductionoratechnologicaladvanceraisesoutput.2.Competitive,profit-maximizingfirmshirelaboruntilthemarginalproductoflaborequalstherealwage.Similarly,thesefirmsrentcapitaluntilthemarginalproductofcapitalequalstherealrentalprice.Therefore,eachfactorofproductionispaiditsmarginalproduct.Iftheproductionfunctionhasconstantreturnstoscale,thenaccordingtoEuler’stheorem,alloutputisusedtocompensatetheinputs.3.Theeconomy’soutputisusedforconsumption,investment,andgovernmentpurchases.Consumptiondependspositivelyondisposableincome.Investmentdependsnegativelyontherealinterestrate.Governmentpurchasesandtaxesaretheexogenousvariablesoffiscalpolicy.4.Therealinterestrateadjuststoequilibratethesupplyanddemandfortheeconomy’soutput—or,equivalently,thesupplyofloanablefunds(saving)andthedemandforloanablefunds(investment).Adecreaseinnationalsaving,perhapsbecauseofanincreaseingovernmentpurchasesoradecreaseintaxesreducestheequilibriumamountofinvestmentandraisestheinterestrate.Anincreaseininvestmentdemand,perhapsbecauseofatechnologicalinnovationorataxincentiveforinvestment,alsoraisestheinterestrate.Anincreaseininvestmentdemandincreasesthequantityofinvestmentonlyifhigherinterestratesstimulateadditionalsaving.Chapter41.Moneyisthestockofassetsusedfortransactions.Itservesasastoreofvalue,aunitofaccount,andamediumofexchange.Differentsortsofassetsareusedasmoney:commoditymoneysystemsuseanassetwithintrinsicvalue,whereasfiatmoneysystemsuseanassetwhosesolefunctionistoserveasmoney.Inmoderneconomies,acentralbanksuchastheFederalReserveisresponsibleforcontrollingthesupplyofmoney.2.ThequantitytheoryofmoneyassumesthatthevelocityofmoneyisstableandconcludesthatnominalGDPisproportionaltothestockofmoney.BecausethefactorsofproductionandtheproductionfunctiondeterminerealGDP,thequantitytheoryimpliesthatthepricelevelisproportionaltothequantityofmoney.Therefore,therateofgrowthinthequantityofmoneydeterminestheinflationrate.3.Seigniorageistherevenuethatthegovernmentraisesbyprintingmoney.Itisataxonmoneyholding.Althoughseigniorageisquantitativelysmallinmosteconomies,itisoftenamajorsourceofgovernmentrevenueineconomiesexperiencinghyperinflation.4.Thenominalinterestrateisthesumoftherealinterestrateandtheinflationrate.TheFishereffectsaysthatthenominalinterestratemovesone-for-onewithexpectedinflation.5.Thenominalinterestrateistheopportunitycostofholdingmoney.Thus,onemightexpectthedemandformoneytodependonthenominalinterestrate.Ifitdoes,thenthepriceleveldependsonboththecurrentquantityofmoneyandthequantitiesofmoneyexpectedinthefuture.6.Thecostsofexpectedinflationincludeshoeleathercosts,menucosts,thecostofrelativepricevariability,taxdistortions,andtheinconvenienceofmakinginflationcorrections.Inaddition,unexpectedinflationcausesarbitraryredistributionsofwealthbetweendebtorsandcreditors.Onepossiblebenefitofinflationisthatitimprovesthefunctioningoflabormarketsbyallowingrealwagestoreachequilibriumlevelswithoutcutsinnominalwages.7.Duringhyperinflations,mostofthecostsofinflationbecomesevere.Hyperinflationstypicallybeginwhengovernmentsfinancelargebudgetdeficitsbyprintingmoney.Theyendwhenfiscalreformseliminatetheneedforseigniorage.8.Accordingtoclassicaleconomictheory,moneyisneutral:themoneysupplydoesnotaffectrealvariables.Therefore,classicaltheoryallowsustostudyhowrealvariablesaredeterminedwithoutanyreferencetothemoneysupply.Theequilibriuminthemoneymarketthendeterminesthepriceleveland,asaresult,allothernominalvariables.Thistheoreticalseparationofrealandnominalvariablesiscalledtheclassicaldichotomy.Chapter61.Thenaturalrateofunemploymentisthesteady-staterateofunemployment.Itdependsontherateofjobseparationandtherateofjobfinding.2.Becauseittakestimeforworkerstosearchforthejobthatbestsuitstheirindividualskillsandtastes,somefrictionalunemploymentisinevitable.Variousgovernmentpolicies,suchasunemploymentinsurance,altertheamountoffrictionalunemployment.3.Structuralunemploymentresultswhentherealwageremainsabovethelevelthatequilibrateslaborsupplyandlabordemand.Minimum-wagelegislationisonecauseofwagerigidity.Unionsandthethreatofunionizationareanother.Finally,efficiency-wagetheoriessuggestthat,forvariousreasons,firmsmayfinditprofitabletokeepwageshighdespiteanexcesssupplyoflabor.4.Whetherweconcludethatmostunemploymentisshort-termorlong-termdependsonhowwelookatthedata.Mostspellsofunemploymentareshort.Yetmostweeksofunemploymentareattributabletothesmallnumberoflong-termunemployed.5.Theunemploymentratesamongdemographicgroupsdiffersubstantially.Inparticular,theunemploymentratesforyoungerworkersaremuchhigherthanforolderworkers.Thisresultsfromadifferenceintherateofjobseparationratherthanfromadifferenceintherateofjobfinding.6.ThenaturalrateofunemploymentintheUnitedStateshasexhibitedlongtermtrends.Inparticular,itrosefromthe1950stothe1970sandthenstarteddriftingdownwardagaininthe1990sandearly2000s.Variousexplanationsofthetrendshavebeenproposed,includingthechangingdemographiccompositionofthelaborforce,changesintheprevalenceofsectoralshifts,andchangesintherateofproductivitygrowth.7.Individualswhohaverecentlyenteredthelaborforce,includingbothnewentrantsandreentrants,makeupaboutone-thirdoftheunemployed.Transitionsintoandoutofthelaborforcemakeunemploymentstatisticsmoredifficulttointerpret.8.AmericanandEuropeanlabormarketsexhibitsomesignificantdifferences.Inrecentyears,EuropehasexperiencedsignificantlymoreunemploymentthantheUnitedStates.Inaddition,becauseofhigherunemployment,shorterworkweeks,moreholidays,andearlierretirement,EuropeansworkfewerhoursthanAmericans.Chapter71.TheSolowgrowthmodelshowsthatinthelongrun,aneconomy’srateofsavingdeterminesthesizeofitscapitalstockandthusitslevelofproduction.Thehighertherateofsaving,thehigherthestockofcapitalandthehigherthelevelofoutput.2.IntheSolowmodel,anincreaseintherateofsavinghasaleveleffectonincomeperperson:itcausesaperiodofrapidgrowth,buteventuallythatgrowthslowsasthenewsteadystateisreached.Thus,althoughahighsavingrateyieldsahighsteady-statelevelofoutput,savingbyitselfcannotgeneratepersistenteconomicgrowth.3.Thelevelofcapitalthatmaximizessteady-stateconsumptioniscalledtheGoldenRulelevel.IfaneconomyhasmorecapitalthanintheGoldenRulesteadystate,thenreducingsavingwillincreaseconsumptionatallpointsintime.Bycontrast,iftheeconomyhaslesscapitalthanintheGoldenRulesteadystate,thenreachingtheGoldenRulerequiresincreasedinvestmentandthuslowerconsumptionforcurrentgenerations.4.TheSolowmodelshowsthataneconomy’srateofpopulationgrowthisanotherlong-rundeterminantofthestandardofliving.AccordingtotheSolowmodel,thehighertherateofpopulationgrowth,thelowerthesteady-statelevelsofcapitalperworkerandoutputperworker.Othertheorieshighlightothereffectsofpopulationgrowth.Malthussuggestedthatpopulationgrowthwillstrainthenaturalresourcesnecessarytoproducefood;Kremersuggestedthatalargepopulationmaypromotetechnologicalprogress.Chapter81.InthesteadystateoftheSolowgrowthmodel,thegrowthrateofincomeperpersonisdeterminedsolelybytheexogenousrateoftechnologicalprogress.2.ManyempiricalstudieshaveexaminedtowhatextenttheSolowmodelcanhelpexplainlong-runeconomicgrowth.Themodelcanexplainmuchofwhatweseeinthedata,suchasbalancedgrowthandconditionalconvergence.Recentstudieshavealsofoundthatinternationalvariationinstandardsoflivingisattributabletoacombinationofcapitalaccumulationandtheefficiencywithwhichcapitalisused.3.IntheSolowmodelwithpopulationgrowthandtechnologicalprogress,theGoldenRule(consumption-maximizing)steadystateischaracterizedbyequalitybetweenthenetmarginalproductofcapital(MPK?d)andthesteady-stategrowthrateoftotalincome(n+g).IntheU.S.economy,thenetmarginalproductofcapitaliswellinexcessofthegrowthrate,indicatingthattheU.S.economyhasalowersavingrateandlesscapitalthanitwouldhaveintheGoldenRulesteadystate.4.PolicymakersintheUnitedStatesandothercountriesoftenclaimthattheirnationsshoulddevotealargerpercentageoftheiroutputtosavingandinvestment.Increasedpublicsavingandtaxincentivesforprivatesavingaretwowaystoencouragecapitalaccumulation.Policymakerscanalsopromoteeconomicgrowthbysettinguptherightlegalandfinancialinstitutionssothatresourcesareallocatedefficientlyandbyensuringproperincentivestoencourageresearchandtechnologicalprogress.5.Intheearly1970s,therateofgrowthofincomeperpersonfellsubstantiallyinmostindustrializedcountries,includingtheUnitedStates.Thecauseofthisslowdownisnotwellunderstood.Inthemid-1990s,theU.S.Growthrateincreased,mostlikelybecauseofadvancesininformationtechnology.6.Moderntheoriesofendogenousgrowthattempttoexplaintherateoftechnologicalprogress,whichtheSolowmodeltakesasexogenous.Thesemodelstrytoexplainthedecisionsthatdeterminethecreationofknowledgethroughresearchanddevelopment.Chapter91.Economiesexperienceshort-runfluctuationsineconomicactivity,measuredmostbroadlybyrealGDP.Thesefluctuationsareassociatedwithmovementinmanymacroeconomicvariables.Inparticular,whenGDPgrowthdeclines,consumptiongrowthfalls(typicallybyasmalleramount),investmentgrowthfalls(typicallybyalargeramount),andunemploymentrises.Althougheconomistslookatvariousleadingindicatorstoforecastmovementsintheeconomy,theseshort-runfluctuationsarelargelyunpredictable.2.Thecrucialdifferencebetweenhowtheeconomyworksinthelongrunandhowitworksintheshortrunisthatpricesareflexibleinthelongrunbutstickyintheshortrun.Themodelofaggregatesupplyandaggregatedemandprovidesaframeworktoanalyzeeconomicfluctuationsandseehowtheimpactofpoliciesandeventsvariesoverdifferenttimehorizons.3.Theaggregatedemandcurveslopesdownward.Ittellsusthatthelowerthepricelevel,thegreatertheaggregatequantityofgoodsandservicesdemanded.4.Inthelongrun,theaggregatesupplycurveisverticalbecauseoutputisdeterminedbytheamountsofcapitalandlaborandbytheavailabletechnologybutnotbythelevelofprices.Therefore,shiftsinaggregatedemandaffectthepricelevelbutnotoutputoremployment.5.Intheshortrun,theaggregatesupplycurveishorizontal,becausewagesandpricesarestickyatpredeterminedlevels.Therefore,shiftsinaggregatedemandaffectoutputandemployment.6.Shockstoaggregatedemandandaggregatesupplycauseeconomicfluctuations.BecausetheFedcanshifttheaggregatedemandcurve,itcanattempttooffsettheseshockstomaintainoutputandemploymentattheirnaturallevels.Chapter101.TheKeynesiancrossisabasicmodelofincomedetermination.Ittakesfiscalpolicyandplannedinvestmentasexogenousandthenshowsthatthereisonelevelofnationalincomeatwhichactualexpenditureequalsplannedexpenditure.Itshowsthatchangesinfiscalpolicyhaveamultipliedimpactonincome.2.Onceweallowplannedinvestmenttodependontheinterestrate,theKeynesiancrossyieldsarelationshipbetweentheinterestrateandnationalincome.Ahigherinterestratelowersplannedinvestment,andthisinturnlowersnationalincome.Thedownward-slopingIScurvesummarizesthisnegativerelationshipbetweentheinterestrateandincome.3.Thetheoryofliquiditypreferenceisabasicmodelofthedeterminationoftheinterestrate.Ittakesthemoneysupplyandthepricelevelasexogenousandassumesthattheinterestrateadjuststoequilibratethesupplyanddemandforrealmoneybalances.Thetheoryimpliesthatincreasesinthemoneysupplylowertheinterestrate.4.Onceweallowthedemandforrealmoneybalancestodependonnationalincome,thetheoryofliquiditypreferenceyieldsarelationshipbetweenincomeandtheinterestrate.Ahigherlevelofincomeraisesthedemandforrealmoneybalances,andthisinturnraisestheinterestrate.Theupward-slopingLMcurvesummarizesthispositiverelationshipbetweenincomeandtheinterestrate.5.TheIS–LMmodelcombinestheelementsoftheKeynesiancrossandtheelementsofthetheoryofliquiditypreference.TheIScurveshowsthepointsthatsatisfyequilibriuminthegoodsmarket,andtheLMcurveshowsthepointsthatsatisfyequilibriuminthemoneymarket.TheintersectionoftheISandLMcurvesshowstheinterestrateandincomethatsatisfyequilibriuminbothmarketsforagivenpricelevel.Chapter111.TheIS–LMmodelisageneraltheoryoftheaggregatedemandforgoodsandservices.Theexogenousvariablesinthemodelarefiscalpolicy,monetarypolicy,andthepricelevel.Themodelexplainstwoendogenousvariables:theinterestrateandthelevelofnationalincome.2.TheIScurverepresentsthenegativerelationshipbetweentheinterestrateandthelevelofincomethatarisesfromequilibriuminthemarketforgoodsandservices.TheLMcurverepresentsthepositiverelationshipbetweentheinterestrateandthelevelofincomethatarisesfromequilibriuminthemarketforrealmoneybalances.EquilibriumintheIS–LMmodel—theintersectionoftheISandLMcurves—representssimultaneousequilibriuminthemarketforgoodsandservicesandinthemarketforrealmoneybalances.3.TheaggregatedemandcurvesummarizestheresultsfromtheIS–LMmodelbysh