Macroeconomics, 2nd edition

For principles of macroeconomics courses.

An evidence-based approach to economics

Macroeconomics presents real economic questions and data to help students learn about the world around them. The text uses themes of optimization, equilibrium, and empiricism to illustrate the power of simple economic ideas and explain and predict what's happening in today's society.

In the 2nd Edition, each chapter begins with an empirical question that is relevant to the life of a student. This is later answered using data in the Evidence-Based Economics feature. As a result of the text's practical emphasis, students learn to apply economic principles to guide the decisions they make in their own daily lives.

Personalize learning with MyLab Economics

MyLab™ Economics is an online homework, tutorial, and assessment program designed to work with this text to engage students and improve results. Within its structured environment, students practice what they learn, test their understanding, and pursue a personalized study plan that helps them better absorb course material and understand difficult concepts.

• Learning Aids. Tied to the textbook,MyLab Economics homework and practice questions regenerate algorithmically to give students unlimited opportunity for practice and mastery. Additionally, Learning Aids such as Help me Solve This offer helpful feedback at the point-of-use when students enter incorrect answers.
• Digital interactives. Economic principles are not static ideas, and learning them shouldn’t be either! Digital Interactives are dynamic and engaging assessment activities that promote critical thinking and application of key economic principles. Each Digital Interactive has 3 to 5 progressive levels and requires approximately 20 minutes to explore, apply, compare, and analyze each topic. Many Digital Interactives include real-time data from FRED™ allowing professors and students to display, in graph and table form, up-to-the-minute data on key macro variables. Digital Interactives can be assigned and graded within MyLab Economics, or used as a lecture tool to encourage engagement, classroom conversation, and group work.
• Interactive Graphs in MyLab Economics enhance the student learning experience. Students can manipulate the coordinates and parameters of these graphs and watch the graphs change in real time, thereby deepening their conceptual understanding of the material.
• Personalized Learning. Not every student learns the same way or at the same rate. With the growing need for acceleration through many courses, it's more important than ever to meet students where they learn. Personalized learning in MyLab Economics gives you the flexibility to incorporate the approach that best suits of your course and your students.
• The Study Plan acts as a tutor, providing personalized recommendations for each of your students based on his or her ability to master the learning objectives in your course. This allows students to focus their study time by pinpointing the precise areas they need to review, and allowing them to use customized practice and learning aids—such as videos, eText, tutorials, and more—to get them back on track. Using the report available in the Gradebook, you can then tailor course lectures to prioritize the content where students need the most support—offering you better insight into classroom and individual performance.
• Dynamic Study Modules help students study effectively on their own by continuously assessing their activity and performance in real time. Here's how it works: students complete a set of questions with a unique answer format that also asks them to indicate their confidence level. Questions repeat until the student can answer them all correctly and confidently. Once completed, Dynamic Study Modules explain the concept using materials from the text. These are available as graded assignments prior to class, and accessible on smartphones, tablets, and computers. NEW! Instructors can now remove questions from Dynamic Study Modules to better fit their course. Available for select titles.

• The Enhanced eText keeps students engaged in learning on their own time, while helping them achieve greater conceptual understanding of course material.
• Experiments are a fun and engaging way to promote active learning and mastery of important economic concepts. Pearson’s Experiments program is flexible and easy for instructors and students to use. Single-player experiments allow your students to play against virtual players from anywhere at any time so long as they have an Internet connection. Multiplayer experiments allow you to assign and manage a real-time experiment with your class. Pre- and post-questions for each experiment are available for assignment in MyLab Economics.
• Economics Exercise Builder allows you to build customized exercises, including multiple-choice, graph drawing, and free-response items—many of which are generated algorithmically so that each time a student works them, a different variation is presented.
• Reporting Dashboard. View, analyze, and report learning outcomes clearly and easily, and get the information you need to keep your students on track throughout the course, with the new Reporting Dashboard. Available via the MyLab Economics Gradebook and fully mobile-ready, the Reporting Dashboard presents student performance data at the class, section, and program levels in an accessible, visual manner.
• Learning Catalytics™ helps you generate class discussion, customize your lecture, and promote peer-to-peer learning with real-time analytics. As a student response tool, Learning Catalytics uses students’ smartphones, tablets, or laptops to engage them in more interactive tasks and thinking.
• NEW! Upload a full PowerPoint® deck for easy creation of slide questions.
• NEW! Team names are no longer case sensitive.
• Help your students develop critical thinking skills.
• Monitor responses to find out where your students are struggling.
• Rely on real-time data to adjust your teaching strategy.
• Automatically group students for discussion, teamwork, and peer-to-peer learning.
• LMS Integration. You can now link from Blackboard Learn, Brightspace by D2L, Canvas, or Moodle to MyLab Economics. Access assignments, rosters, and resources, and synchronize grades with your LMS Gradebook. For students, single sign-on provides access to all the personalized learning resources that make studying more efficient and effective.

About the book

Teach economics through three unified themes

Three key principles--optimization, equilibrium, and empiricism--lie at the heart of the authors’ approach. Chapters 1–4 introduce these key themes, and lay the groundwork for understanding the economic way of thinking about the world.

1. Optimization. The first principle--that people try to choose the best available option--is optimization. Economists believe that optimization explains most choices people make, including minor decisions like deciding whether to eat a cheeseburger, and major decisions like deciding whom to date or marry. When people fail to optimize perfectly, economic reasoning can be used to analyze the mistake and to suggest a better course of action.
2. Equilibrium. Economic systems tend toward equilibrium, wherein each economic actor feels that he or she cannot do any better by picking another course of action. This principle highlights the connections among economic actors and their choices. In a state of equilibrium, consumers and purveyors of goods and services are simultaneously optimizing, and their behaviors are consequently intertwined.
3. Empiricism. While the first two key principles are conceptual, the third is methodological. Economists use data to test economic theories, learn about the world, and speak to policymakers. The emphasis on matching theories with real-world data to answer specific questions helps to show students the evidence behind the theory, making economics concrete, interesting, and fun.

Real issues engage students with the content

• NEW! Coverage describing the growth of economic inequality, and emphasizing that inequality is not measured in economic aggregates, such as GDP (Chapter 19).
• Evidence-Based Economics (EBE) features show how economists use data to answer the question posed in the opening paragraph of each chapter. EBEs use actual data from field experiments, lab experiments, and the government or naturally occurring data, while highlighting major concepts in the chapter. These features let students get a real look at economics as it plays out in the world around them, and gives them the skills to question systematically and evaluate what they read. Examples include:
• NEW! Uber and the invisible hand?
• NEW! What can the government do to lower earthquakes in Oklahoma?
• Letting the Data Speak features reinforce the theme of evidence behind the theory. These short, targeted explorations analyze an economic question by using real data as the foundation of the discussion. Among the many issues explored:
• NEW!Forecasts on the eve of the election
• NEW! The great productivity puzzle--discussing how we may be experiencing a slow-down of aggregate productivity despite the rapid introduction of a range of new technologies in the economy (Chapter 21)
• NEW! Democracy and growth, showing the positive impact of democratic political institutions on economic growth (Chapter 22)
• NEW! Financing start-ups (Chapter 24)
• NEW! The response of consumption to tax cuts (Chapter 27)
• Choice and Consequence features emphasize optimization--one of the key themes in the book--by focusing on making the best decision. These features ask students to make an economic decision, or evaluate the consequences of past real decisions. The authors then explain how an economist might analyze the same decision. Examples of choices investigated include:
• NEW! The societal consequences of the expulsion of Jewish faculty from universities in Nazi Germany (Chapter 20)
• NEW! Minimum wage laws and employment (Chapter 23)
• EXPANDED! Luddite resistance to new technology and what this can teach us about the disruption that new and more productive robots are bringing to the economy today (Chapter 23)
• NEW! Obtaining reserves outside of the federal funds market (Chapter 25)
• NEW! The new administration’s fiscal policy proposals (Chapter 27)
• NEW! The political forces that influence trade policy (Chapter 28)
• NEW! Graphical Exhibit describing the relationship between interest rates and net capital outflows, unifying material from several chapters for the analysis of open economy macroeconomics (Chapter 29)

Show the importance of macroeconomic concepts in everyday life

Practical coverage of macroeconomics helps students see how they can apply course content in their own decision-making.

• UPDATED! Examination of the labor market in terms of the downward nominal wage rigidity (Chapters 23, 26, and 27).
• UPDATED! Simplified presentation of the two-part labor supply curve for easier student comprehension (Chapters 26 and 27).

About the book

Real issues engage students with the content

• Coverage describing the growth of economic inequality, and emphasizing that inequality is not measured in economic aggregates, such as GDP (Chapter 19).
• Evidence-Based Economics (EBE) features show how economists use data to answer the question posed in the opening paragraph of each chapter. EBEs use actual data from field experiments, lab experiments, and the government or naturally occurring data, while highlighting major concepts in the chapter. These features let students get a real look at economics as it plays out in the world around them, and gives them the skills to question systematically and evaluate what they read. Examples include:
• Uber and the invisible hand?
• What can the government do to lower earthquakes in Oklahoma?
• Letting the Data Speak features reinforce the theme of evidence behind the theory. These short, targeted explorations analyze an economic question by using real data as the foundation of the discussion. Among the many issues explored:
• Forecasts on the eve of the election
• The great productivity puzzle--discussing how we may be experiencing a slow-down of aggregate productivity despite the rapid introduction of a range of new technologies in the economy (Chapter 21)
• Democracy and growth, showing the positive impact of democratic political institutions on economic growth (Chapter 22)
• Financing start-ups (Chapter 24)
• The response of consumption to tax cuts (Chapter 27)
• Choice and Consequence features emphasize optimization--one of the key themes in the book--by focusing on making the best decision. These features ask students to make an economic decision, or evaluate the consequences of past real decisions. The authors then explain how an economist might analyze the same decision. Examples of choices investigated include:
• The societal consequences of the expulsion of Jewish faculty from universities in Nazi Germany (Chapter 20)
• Minimum wage laws and employment (Chapter 23)
• Luddite resistance to new technology and what this can teach us about the disruption that new and more productive robots are bringing to the economy today (Chapter 23)
• Obtaining reserves outside of the federal funds market (Chapter 25)
• The new administration’s fiscal policy proposals (Chapter 27)
• The political forces that influence trade policy (Chapter 28)
• Graphical Exhibit describing the relationship between interest rates and net capital outflows, unifying material from several chapters for the analysis of open economy macroeconomics (Chapter 29)

Show the importance of macroeconomic concepts in everyday life

Practical coverage of macroeconomics helps students see how they can apply course content in their own decision-making.

• Examination of the labor market in terms of the downward nominal wage rigidity (Chapters 23, 26, and 27).
• Simplified presentation of the two-part labor supply curve for easier student comprehension (Chapters 26 and 27).