MankiwMA_IM_t_032431907X 12/29/05 12:37 PM Page 1
Instructor's Manual with Solutions Manual
Principles of Macroeconomics
FOURTH EDITION
N. Gregory Mankiw
Harvard University
Prepared by
Linda Ghent
Eastern Illinois University
, Instructor’s Manual
Principles of Macroeconomics, 4th Edition
N. Gregory Mankiw
Prepared by Linda S. Ghent
VP/Editorial Director: Sr. Production Project Manager: Assistant Editor:
Jack W. Calhoun Emily S. Gross Erin Berger
Editor-in-Chief: Manager of Technology, Editorial:
Ancillary Coordinator:
Alex von Rosenberg Vicky True
Erin M. Donohoe
Publisher: Technology Project Editor:
Steve Momper Dana Cowden Art Director:
Michelle Kunkler
Sr. Acquisitions Editor:
Mike Worls Web Coordinator: Production Artist:
Karen Schaffer Patti Hudepohl
Developmental Editor:
Jane Tufts Internal and Cover Designer:
Sr. Manufacturing Coordinator: Stratton Design
Contributing Editors: Sandee Milewski
Sarah K. Dorger Cover Illustration:
Jennifer E. Baker Production House: Tate Gallery, London/Art Resource, NY
OffCenter Concept House
Sr. Marketing Manager: Internal Illustrator:
Brian Joyner Printer: William Low/Cobalt Illustration Services
Darby Printing
Assoc. Marketing Communications Atlanta, GA
Manager:
Sarah Greber
COPYRIGHT © 2007 ALL RIGHTS RESERVED. No part of For permission to use material from this
Thomson South-Western, a part of The this work covered by the copyright text or product, submit a request online
Thomson Corporation. Thomson, the hereon may be reproduced or used in at http://www.thomsonrights.com.
Star logo, and South-Western are any form or by any means—graphic,
trademarks used herein under license. electronic, or mechanical, including For more information about our
photocopying, recording, taping, Web products, contact us at:
Printed in the United States of America distribution, information storage and
1 2 3 4 5 09 08 07 06 retrieval systems, or in any other Thomson Learning Academic Resource
manner—except as may be permitted Center
ISBN 0-324-31907-X by the license terms herein. 1-800-423-0563
Thomson Higher Education
5191 Natorp Boulevard
Mason, OH 45040
USA
,Comparative Table of Contents
Brief
Core Micro Macro Essentials Macro
Part 1: Introduction Part 1 Part 1 Part 1 Part 1
1 Ten Principles of Economics 1 1 1 1
2 Thinking Like an Economist 2 2 2 2
3 Interdependence and the Gains from Trade 3 3 3 3
Part 2: How Markets Work Part 2 Part 2 Part 2 Part 2
4 The Market Forces of Supply and Demand 4 4 4 4
5 Elasticity and Its Application 5 5 5
6 Supply, Demand, and Government Policies 6 6 6
Part 3: Markets and Welfare Part 3 Part 3 Part 3
7 Consumers, Producers, and the Efficiency of Markets 7 7 7
8 Application: The Costs of Taxation 8 8 8
9 Application: International Trade 9 9 9
Part 4: The Economics of the Public Sector Part 4 Part 4
10 Externalities 10 10
11 Public Goods and Common Resources 11 11
12 The Design of the Tax System 12
Part 5: Firm Behavior and the Organization of Industry Part 5 Part 5
13 The Costs of Production 13 12
14 Firms in Competitive Markets 14 13
15 Monopoly 15 14
16 Oligopoly 16
17 Monopolistic Competition 17
Part 6: The Economics of Labor Market Part 6
18 The Markets for the Factors of Production 18
19 Earnings and Discrimination 19
20 Income Inequality and Poverty 20
Part 7: Topics for Further Study Part 7
21 The Theory of Consumer Choice 21
22 Frontiers of Microeconomics 22
Part 8: The Data of Macroeconomics Part 4 Part 6 Part 3
23 Measuring a Nation’s Income 10 15 5
24 Measuring the Cost of Living 11 16 6
Part 9: The Real Economy in the Long Run Part 5 Part 7 Part 4
25 Production and Growth 12 17 7
26 Saving, Investment, and the Financial System 13 18 8
27 The Basic Tools of Finance 14 19 9
28 Unemployment 15 20 10
Part 10: Money and Prices in the Long Run Part 6 Part 8 Part 5
29 The Monetary System 16 21 11
30 Money Growth and Inflation 17 22 12
Part 11: The Macroeconomics of Open Economics Part 7 Part 6
31 Open-Economy Macroeconomics: Basic Concepts 18 13
32 A Macroeconomic Theory of the Open Economy 19 14
Part 12: Short-Run Economic Fluctuations Part 8 Part 9 Part 7
33 Aggregate Demand and Aggregate Supply 20 23 15
34 The Influence of Monetary and Fiscal Policy on Aggregate Demand 21 24 16
35 The Short-Run Trade-off between Inflation and Unemployment 22 17
Part 13: Final Thoughts Part 9 Part 8
36 Five Debates over Macroeconomic Policy 23 18
, Contents
Chapter 1 Ten Principles of Economics 1
Chapter 2 Thinking Like an Economist 17
Chapter 3 Interdependence and the Gains from Trade 37
Chapter 4 The Market Forces of Supply and Demand 53
Chapter 5 Elasticity and Its Application 91
Chapter 6 Supply, Demand, and Government Policies 111
Chapter 7 Consumers, Producers, and the Efficiency of Markets 131
Chapter 8 Application: The Costs of Taxation 155
Chapter 9 Application: International Trade 175
Chapter 10 Measuring a Nation’s Income 197
Chapter 11 Measuring the Cost of Living 213
Chapter 12 Production and Growth 225
Chapter 13 Saving, Investment, and the Financial System 239
Chapter 14 The Basic Tools of Finance 257
Chapter 15 Unemployment 269
Chapter 16 The Monetary System 287
Chapter 17 Money Growth and Inflation 305
Chapter 18 Open-Economy Macroeconomics: Basic Concepts 323
Chapter 19 A Macroeconomic Theory of the Open Economy 341
Chapter 20 Aggregate Demand and Aggregate Supply 367
Chapter 21 The Influence of Monetary and Fiscal Policy
on Aggregate Demand 399
Chapter 22 The Short-Run Trade-off between Inflation
and Unemployment 421
Chapter 23 Five Debates over Macroeconomic Policy 445
Instructor's Manual with Solutions Manual
Principles of Macroeconomics
FOURTH EDITION
N. Gregory Mankiw
Harvard University
Prepared by
Linda Ghent
Eastern Illinois University
, Instructor’s Manual
Principles of Macroeconomics, 4th Edition
N. Gregory Mankiw
Prepared by Linda S. Ghent
VP/Editorial Director: Sr. Production Project Manager: Assistant Editor:
Jack W. Calhoun Emily S. Gross Erin Berger
Editor-in-Chief: Manager of Technology, Editorial:
Ancillary Coordinator:
Alex von Rosenberg Vicky True
Erin M. Donohoe
Publisher: Technology Project Editor:
Steve Momper Dana Cowden Art Director:
Michelle Kunkler
Sr. Acquisitions Editor:
Mike Worls Web Coordinator: Production Artist:
Karen Schaffer Patti Hudepohl
Developmental Editor:
Jane Tufts Internal and Cover Designer:
Sr. Manufacturing Coordinator: Stratton Design
Contributing Editors: Sandee Milewski
Sarah K. Dorger Cover Illustration:
Jennifer E. Baker Production House: Tate Gallery, London/Art Resource, NY
OffCenter Concept House
Sr. Marketing Manager: Internal Illustrator:
Brian Joyner Printer: William Low/Cobalt Illustration Services
Darby Printing
Assoc. Marketing Communications Atlanta, GA
Manager:
Sarah Greber
COPYRIGHT © 2007 ALL RIGHTS RESERVED. No part of For permission to use material from this
Thomson South-Western, a part of The this work covered by the copyright text or product, submit a request online
Thomson Corporation. Thomson, the hereon may be reproduced or used in at http://www.thomsonrights.com.
Star logo, and South-Western are any form or by any means—graphic,
trademarks used herein under license. electronic, or mechanical, including For more information about our
photocopying, recording, taping, Web products, contact us at:
Printed in the United States of America distribution, information storage and
1 2 3 4 5 09 08 07 06 retrieval systems, or in any other Thomson Learning Academic Resource
manner—except as may be permitted Center
ISBN 0-324-31907-X by the license terms herein. 1-800-423-0563
Thomson Higher Education
5191 Natorp Boulevard
Mason, OH 45040
USA
,Comparative Table of Contents
Brief
Core Micro Macro Essentials Macro
Part 1: Introduction Part 1 Part 1 Part 1 Part 1
1 Ten Principles of Economics 1 1 1 1
2 Thinking Like an Economist 2 2 2 2
3 Interdependence and the Gains from Trade 3 3 3 3
Part 2: How Markets Work Part 2 Part 2 Part 2 Part 2
4 The Market Forces of Supply and Demand 4 4 4 4
5 Elasticity and Its Application 5 5 5
6 Supply, Demand, and Government Policies 6 6 6
Part 3: Markets and Welfare Part 3 Part 3 Part 3
7 Consumers, Producers, and the Efficiency of Markets 7 7 7
8 Application: The Costs of Taxation 8 8 8
9 Application: International Trade 9 9 9
Part 4: The Economics of the Public Sector Part 4 Part 4
10 Externalities 10 10
11 Public Goods and Common Resources 11 11
12 The Design of the Tax System 12
Part 5: Firm Behavior and the Organization of Industry Part 5 Part 5
13 The Costs of Production 13 12
14 Firms in Competitive Markets 14 13
15 Monopoly 15 14
16 Oligopoly 16
17 Monopolistic Competition 17
Part 6: The Economics of Labor Market Part 6
18 The Markets for the Factors of Production 18
19 Earnings and Discrimination 19
20 Income Inequality and Poverty 20
Part 7: Topics for Further Study Part 7
21 The Theory of Consumer Choice 21
22 Frontiers of Microeconomics 22
Part 8: The Data of Macroeconomics Part 4 Part 6 Part 3
23 Measuring a Nation’s Income 10 15 5
24 Measuring the Cost of Living 11 16 6
Part 9: The Real Economy in the Long Run Part 5 Part 7 Part 4
25 Production and Growth 12 17 7
26 Saving, Investment, and the Financial System 13 18 8
27 The Basic Tools of Finance 14 19 9
28 Unemployment 15 20 10
Part 10: Money and Prices in the Long Run Part 6 Part 8 Part 5
29 The Monetary System 16 21 11
30 Money Growth and Inflation 17 22 12
Part 11: The Macroeconomics of Open Economics Part 7 Part 6
31 Open-Economy Macroeconomics: Basic Concepts 18 13
32 A Macroeconomic Theory of the Open Economy 19 14
Part 12: Short-Run Economic Fluctuations Part 8 Part 9 Part 7
33 Aggregate Demand and Aggregate Supply 20 23 15
34 The Influence of Monetary and Fiscal Policy on Aggregate Demand 21 24 16
35 The Short-Run Trade-off between Inflation and Unemployment 22 17
Part 13: Final Thoughts Part 9 Part 8
36 Five Debates over Macroeconomic Policy 23 18
, Contents
Chapter 1 Ten Principles of Economics 1
Chapter 2 Thinking Like an Economist 17
Chapter 3 Interdependence and the Gains from Trade 37
Chapter 4 The Market Forces of Supply and Demand 53
Chapter 5 Elasticity and Its Application 91
Chapter 6 Supply, Demand, and Government Policies 111
Chapter 7 Consumers, Producers, and the Efficiency of Markets 131
Chapter 8 Application: The Costs of Taxation 155
Chapter 9 Application: International Trade 175
Chapter 10 Measuring a Nation’s Income 197
Chapter 11 Measuring the Cost of Living 213
Chapter 12 Production and Growth 225
Chapter 13 Saving, Investment, and the Financial System 239
Chapter 14 The Basic Tools of Finance 257
Chapter 15 Unemployment 269
Chapter 16 The Monetary System 287
Chapter 17 Money Growth and Inflation 305
Chapter 18 Open-Economy Macroeconomics: Basic Concepts 323
Chapter 19 A Macroeconomic Theory of the Open Economy 341
Chapter 20 Aggregate Demand and Aggregate Supply 367
Chapter 21 The Influence of Monetary and Fiscal Policy
on Aggregate Demand 399
Chapter 22 The Short-Run Trade-off between Inflation
and Unemployment 421
Chapter 23 Five Debates over Macroeconomic Policy 445
