Contents How to Use the Study Guide to Money, Banking, and Monetary Policy Learn Economics xi 13 Money and Banking 147 14 How Banks Create Money 159 An Introduction to Economics and the Economy 15 The Federal Reserve Banks and Monetary 1 The Nature and Method of Economics 1 Policy 169 2 The Economizing Problem 17 3 Understanding lndividual Markets: Demand Problems and Controversies and Supply 27 in Macroeconomics 4 Pure Capitalism and the Market System 39 16 Alternative Views on Macro Theory and Policy 183 5 The Mixed Economy: Private and Public 17 The lnflation-Unemployment Relationship 197 Sectors 47 18 Budget Deficits and the Public Debt 213 6 The United States in the Global Economy 59 19 Economic Growth 225 National Income, Employment, and Fiscal Policy 7 Measuring Domestic Output, National lncome, International Economics and the W orld Economy and the Price Level 71 20 lnternational Trade 237 8 Macroeconomic lnstability: Unemployment 21 Exchange Rates, the Balance of Payments, and lnflation 83 and Trade Deficits 251 9 Building the Aggregate Expenditures Model 95 22 Growth and the Less Developed Countries 267 10 Aggregate Expenditures: The Multiplier, 23 Russia: An Economy in Transition 279 Net Exports, and Government 107 11 Aggregate Demand and Aggregate Supply 121 12 Fiscal Policy 135 Glossary 289