Chapter 1

Introduction to Macroeconomics and National Income Accounting

Basic issues studied in macroeconomics

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Measurement of gross domestic product (GDP)

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Income, expenditure and the circular flow

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Real versus nominal GDP

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Price indices and national income accounting for an open economy

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Balance of payments: current and capital accounts

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Chapter 2

Money

Functions of money and its role

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Quantity theory of money

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Determination of money supply and demand

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Credit creation and the banking system

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Tools of monetary policy

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Chapter 3

Inflation

Causes and effects of inflation

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Social costs of inflation

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Hyperinflation

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Inflation and interest rates

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Fisher effect and inflation tax

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Chapter 4

The Closed Economy in the Short Run

Classical and Keynesian systems of macroeconomics

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Simple Keynesian model of income determination

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IS-LM model: goods market and money market equilibrium

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Multiplier and its variations

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Fiscal and monetary multipliers

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Chapter 5

The Open Economy

Exchange rates: nominal and real

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Purchasing power parity

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Interest rate parity

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Mundell-Fleming model

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Macroeconomic policy in an open economy

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