TEST BANK
Charles I. Jones
Macroeconomics
FOURTH EDITION
Robert Sonora
FORT LEWIS COLLEGE
n W • W • NORTON & COMPANY • NEW YORK • LONDON
,W. W. Norton & Company has been independent since its founding in 1923, when William Warder Norton and Mary D.
Herter Norton first published lectures delivered at the People’s Institute, the adult education division of New York City’s Cooper
Union. The firm soon expanded its program beyond the Institute, publishing books by celebrated academics from America
and abroad. By midcentury, the two major pillars of Norton’s publishing program—trade books and college texts—were
firmly established. In the 1950s, the Norton family transferred control of the company to its employees, and today—with a
staff of four hundred and a comparable number of trade, college, and professional titles published each year—W. W. Norton
& Company stands as the largest and oldest publishing house owned wholly by its employees.
Copyright © 2017, 2014, 2011, 2008 by W. W. Norton & Company, Inc.
All rights reserved.
Associate Media Editor: Victoria Reuter
Production Manager: Eric Pier-Hocking
Composition: Westchester Publishing Services
W. W. Norton & Company, Inc.
500 Fifth Avenue, New York, N.Y. 10110 -0017
wwnorton.com
,TABLE OF CONTENTS
Preface v
Part 1: Preliminaries
Chapter 1 | Introduction to Macroeconomics 1
Chapter 2 | Measuring the Macroeconomy 10
Part 2: The Long Run
Chapter 3 | An Overview of Long-Run Economic Growth 40
Chapter 4 | A Model of Production 66
Chapter 5 | The Solow Growth Model 104
Chapter 6 | Growth and Ideas 138
Chapter 7 | The Labor Market, Wages, and Unemployment 169
Chapter 8 | Inflation 200
Part 3: The Short Run
Chapter 9 | An Introduction to the Short Run 227
Chapter 10 | The Great Recession: A First Look 260
Chapter 11 | The IS Curve 284
Chapter 12 | Monetary Policy and the Phillips Curve 320
Chapter 13 | Stabilization Policy and the AS/AD Framework 358
Chapter 14 | The Great Recession and the Short-Run Model 386
Chapter 15 | DSGE Models: The Frontier of Business Cycle Research 419
iii
, iv | Contents
Part 4: Applications and Microfoundations
Chapter 16 | Consumption 452
Chapter 17 | Investment 482
Chapter 18 | The Government and the Macroeconomy 515
Chapter 19 | International Trade 543
Chapter 20 | Exchange Rates and International Finance 571
Chapter 21 | Parting Thoughts 610
Charles I. Jones
Macroeconomics
FOURTH EDITION
Robert Sonora
FORT LEWIS COLLEGE
n W • W • NORTON & COMPANY • NEW YORK • LONDON
,W. W. Norton & Company has been independent since its founding in 1923, when William Warder Norton and Mary D.
Herter Norton first published lectures delivered at the People’s Institute, the adult education division of New York City’s Cooper
Union. The firm soon expanded its program beyond the Institute, publishing books by celebrated academics from America
and abroad. By midcentury, the two major pillars of Norton’s publishing program—trade books and college texts—were
firmly established. In the 1950s, the Norton family transferred control of the company to its employees, and today—with a
staff of four hundred and a comparable number of trade, college, and professional titles published each year—W. W. Norton
& Company stands as the largest and oldest publishing house owned wholly by its employees.
Copyright © 2017, 2014, 2011, 2008 by W. W. Norton & Company, Inc.
All rights reserved.
Associate Media Editor: Victoria Reuter
Production Manager: Eric Pier-Hocking
Composition: Westchester Publishing Services
W. W. Norton & Company, Inc.
500 Fifth Avenue, New York, N.Y. 10110 -0017
wwnorton.com
,TABLE OF CONTENTS
Preface v
Part 1: Preliminaries
Chapter 1 | Introduction to Macroeconomics 1
Chapter 2 | Measuring the Macroeconomy 10
Part 2: The Long Run
Chapter 3 | An Overview of Long-Run Economic Growth 40
Chapter 4 | A Model of Production 66
Chapter 5 | The Solow Growth Model 104
Chapter 6 | Growth and Ideas 138
Chapter 7 | The Labor Market, Wages, and Unemployment 169
Chapter 8 | Inflation 200
Part 3: The Short Run
Chapter 9 | An Introduction to the Short Run 227
Chapter 10 | The Great Recession: A First Look 260
Chapter 11 | The IS Curve 284
Chapter 12 | Monetary Policy and the Phillips Curve 320
Chapter 13 | Stabilization Policy and the AS/AD Framework 358
Chapter 14 | The Great Recession and the Short-Run Model 386
Chapter 15 | DSGE Models: The Frontier of Business Cycle Research 419
iii
, iv | Contents
Part 4: Applications and Microfoundations
Chapter 16 | Consumption 452
Chapter 17 | Investment 482
Chapter 18 | The Government and the Macroeconomy 515
Chapter 19 | International Trade 543
Chapter 20 | Exchange Rates and International Finance 571
Chapter 21 | Parting Thoughts 610
